Canada beats expectations, adds 150,000 jobs in January

OTTAWA, Canada - The Canadian economy defied projections by adding 150,000 new jobs in January, but scads of new job seekers kept the unemployment rate at a steady 5 percent, the national statistical agency said Friday.

The unemployment rate was just slightly above a record low of 4.9 percent recorded last June, while the size of the labor force has continued to grow.

The strong employment gains, according to Statistics Canada, were driven primarily by people aged 25 to 54.

The gains -- which mirrored similar strong hiring activity in the United States -- were recorded across several industries, led by a bounce back in wholesale and retail trade (+59,000), health care and social assistance (+40,000) and educational services (+18,000), the agency said.

The majority of those jobs were in full time work.

At the same time, employment declined in transportation and warehousing (-17,000).

"The music has clearly not stopped for the Canadian labor market," Desjardins analyst Royce Mendes commented in a research note, describing the job gains as "massive."

Total hours worked rose in January too, notably in the construction industry that is sensitive to interest rate hikes, he pointed out.

The sector's apparent "re-acceleration even after all of the rate hikes of the past year will be concerning to Bank of Canada officials," Mendes opined.

The central bank recently announced a pause in its aggressive monetary policy after eight hikes over the past year to 4.5 percent, in a bid to tame inflation. But it warned also that it could start hiking rates anew if the economy does not cool, as hoped.

Royal Bank of Canada economist Carrie Freestone noted that job postings are still up 50 percent from pre-pandemic levels, despite coming down a bit in recent months.

She predicted that the labor market would not remain tight in the near term as interest rate hikes, after a lag, start impacting demand for goods and services.

"Moreover, with record high participation and fewer unemployed Canadians to fill jobs, job creation is not sustainable at the current pace," she concluded. -- Agence France-Presse