By Robb M. Stewart
OTTAWA--Stronger-than-anticipated hiring by Canadian companies last month helped push the unemployment rate down for the first time in just over a year, though the ongoing population boom continued to outpace job growth.
The number of employed working-aged people in Canada climbed 37,300 in January from the month before, and the unemployment rate was 0.1 percentage point lower at 5.7%, the first decline in 13 months, Statistics Canada reported Friday. The pace of hiring was the strongest since September after little change the past three months and was more than double the increase expected by economists, who were anticipating a jobless rate of 5.9%.
Following a blowout U.S. jobs report, the latest figures also hint at continued resilience in Canada's labor market, though the rise in employment for January was concentrated in part-time roles. When calculated using U.S. Labor Department methodology, Canada's unemployment rate was unchanged at 4.8%. U.S. employers added 353,000 jobs in January, the strongest in a year, and the unemployment rate there held steady at 3.7%.
Wages in Canada also remains an inflationary pressure that the central bank is watching closely, though the pace of growth eased to start the year.
Average hourly wages for permanent employees rose 5.3% from a year earlier, in line what economists anticipated and cooler than December's 5.7% advance. Still, wage growth remains elevated and continues to outrun broader inflation, which unexpectedly picked up to 3.4% in December.
Bank of Canada Gov. Tiff Macklem has cautioned the path to getting consumer inflation to a 2% target, which is expected in 2025, won't be smooth. Bank policymakers during last month's policy meeting, when they again opted to hold the benchmark interest rate steady, agreed that wage growth would moderate gradually given reports labor shortages were around normal levels and the economy had more supply than demand.
The central bank expects the economy to remain weak in the first half of this year, before picking up in the second half, as past rate increases continue to dampen consumer spending businesses curtailed investment and hiring plans. Inflation is projected to remain around 3% through mid-year.
While the jobless rate in Canada dipped, the employment rate in Canada--the proportion of the working-age population that is employed--fell for a fourth consecutive month, slipping 0.1% on the month before to 61.6% in January. The rate has been trending lower after a recent high of 62.5% in January.
The participation rate also declined, easing 0.2 point to 65.3% as the number of people in the workforce was broadly steady and the working-age population increased 125,500 during the month.
Statistics Canada's survey showed total hours worked increased 0.6% on-month, and were up 1.1% compared with a year earlier.
All of the of the jobs added in January were in part-time employment, which added 48,900 jobs from the month before where 11,600 full-time jobs were lost.
By class of worker, while self-employment was down for the month and private-sector jobs little changed, the public sector drove employment growth with an increase of 47,600.
Employment gains were across the services-producing sector, with the first increase for wholesale and retail trade since last June, and gains in other segments including finance, insurance and real estate, educational services, transportation and warehousing, and business, building and support services.
There were fewer jobs for the month in the goods-producing sector, with losses in agriculture and construction that offset a rise in manufacturing.
Write to Robb M. Stewart robb.stewart@wsj.com
(END) Dow Jones Newswires
02-09-24 0914ET
