Canada Sheds 88,000 Jobs In January--Update

02/09/18 10:39 AM EST
By Kim Mackrael 

OTTAWA -- Canada's unemployment rate ticked up in January after hitting a 10-year low in the previous month, as both the public and private sectors shed workers.

The Canadian economy dropped a net 88,000 jobs in January on a seasonally adjusted basis, Statistics Canada said Friday. The figures came in sharply below market expectations, which called for an increase in employment of 10,000, according to economists at Royal Bank of Canada.

Canada's jobless rate, meanwhile, was 5.9% in January, up from a revised reading of 5.8% in December. When using U.S. Labor Department methodology, the country's unemployment rate was 4.9% in January.

Market expectations were for Canada's jobless rate to hold steady in January at 5.8%.

The latest jobs report comes several weeks after the Bank of Canada raised its benchmark interest rate to 1.25% in January. The central bank said at the time that the economy was running roughly at capacity and cited recent job growth as one of the factors that influenced its decision.

TD Bank economist James Marple said the jobs report is unlikely to change the Bank of Canada's outlook because it comes on the heels of significant employment gains and the jobless rate is still low. Instead, the January report is consistent with an economy moving to a more neutral rate of growth after a particularly strong 2017, he said.

"For all intents and purposes the economy is still at full employment," Mr. Marple said. "Unless that was to meaningfully reverse, I don't think the [Bank of Canada] is going to change its view on one month of job losses."

The January rate increase was the third of its kind since mid-2017, and the Bank of Canada has signaled that it is likely to tighten further after years of ultralow interest rates. However, the central bank said in January that it would remain cautious because of the heavy debt loads some Canadian households carry and uncertainty tied to current negotiations on the North American Free Trade Agreement.

In January, wages advanced on a one-year basis by 3.3%, marking a fifth consecutive month of increases over 2%.

All of the net job losses in January were in the part-time category. The employment report said the number of part-time jobs declined by 137,000, while full-time positions increased by 49,000. The private sector dropped 70,700 jobs, while the public sector lost 41,200 employees.

The number of workers who are self-employed -- usually independent contractors or freelancers -- grew by 23,900 in January from the previous month.

Statistics Canada had originally estimated Canada's jobless rate at 5.7% for December, but later revised the figure to 5.8%. The data agency said the last time the country's unemployment rate hit 5.8% was in October 2007.

Write to Kim Mackrael at


(END) Dow Jones Newswires

February 09, 2018 10:39 ET (15:39 GMT)

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