Yahoo Finance Canadian economy lost 200,000 jobs in January
The Canadian economy lost 200,000 jobs in January, far worse than the 110,000 job losses economists had expected.
Statistics Canada says widespread public health restrictions due to the Omicron variant helped push the unemployment rate up 0.5 percentage points to 6.5 per cent, the first move higher in nine months.
Losses were in part-time (-117,000) and full-time (-83,000) work. Capacity limits or closures at places like stores, restaurants, concert halls, and gyms helped lead to a loss of 223,000 jobs in services-producing industries. Schools in parts of the country also switched to online learning.
Declines were driven largely by Quebec and Ontario
Total hours worked fell 2.2 per cent after returning to pre-COVID levels in November and December. Illness or disability caused 10 per cent of employees to be absent from work in January.
Average hourly wage growth tapered to a 2.4 per cent increase year over year, down from 2.7 per cent in December.
The number of people who were employed but worked less than half their usual hours rose by 66.1 per cent in January, the largest increase since March 2020.
Bank of Canada still on track to raise rates
Goods producing sectors added 23,000 jobs, which Desjardin’s managing director and head of macro strategy Royce Mendes calls ‘sunshine peaking through those storm clouds.”
“Moreover, virus-related hospitalizations appear to have peaked at the national level, which has allowed provincial governments to ease restrictions and made Canadians feel a bit safer about venturing out of their homes again,” said Mendes.
“That’s the beginnings of a recipe for another swift post-Covid-wave rebound. So, with the Bank of Canada on a mission to head off further inflationary pressures, central bankers are still on track to hike rates in March.”
The Bank of Canada's next interest rate announcement is on March 2, before the next round of jobs data. If history is any indication, Canada's central bank can plan for a rebound following job losses in January.
"The Canadian labour market showed impressive ability to rebound after previous waves last year, and some of the prevailing conditions that helped the recovery, like elevated employer hiring appetite, remain," said Indeed senior economist Brendon Bernard.
"Progress should get back on the right track, but will require ongoing positive economic momentum to sustain it."
The U.S. job market beat expectations of 125,000 new jobs by adding 467,000.
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.
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