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Canadian employers added many more jobs than expected last month and the jobless rate tumbled to a 33-year low in another sign of the contrasting economies between Canada and the U.S.
The economy created 46,400 positions in January, quadruple forecasts, most of them in the private sector and full time, Statistics Canada said Friday. The unemployment rate slid to 5.8 per cent as a record number of Canadians headed to work last month.
It's a stark difference from a U.S. report last week , which showed the first jobs slide in four years, led by construction firms and factories, deepening concern that the world's largest economy is sliding into recession.
“Today's upbeat jobs report lends some heavy-duty weight to the view that the Canadian economy is faring better than its U.S. counterpart,” said Douglas Porter, deputy chief economist at BMO Nesbitt Burns, who cautioned that “a deeper dive in U.S. activity would no doubt eventually find an echo in Canadian growth.”
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The Canadian dollar broke through parity after the report suggested the economy remains robust. A jobless rate at a generational low and strong wage growth “reinforces the idea that the Bank of Canada will not need to make the deep, protracted rate cuts that we've seen from the Federal Reserve to keep the Canadian economy afloat,” said Jacqui Douglas, economics strategist at TD Securities, in a note.
Even factories added jobs last month. The manufacturing sector created about 17,000 positions, though the increase may be a one-month blip. The industry has shed 113,000 jobs in the past year and most believe further cuts will come as the dollar stays high and U.S. demand withers.
January's surge was led by full-time positions and brought total growth over the past year to 337,000 new positions. Full-time work has grown at nearly twice the pace as part-time in that time.
Growth in the private sector led January's increase, reversing a year-long trend of largely public-sector job creation. Professional, scientific and technical services as well as construction companies spurred last month's gains.
Building activity topped expectations at the start of this year, led by a flurry of condo construction, a separate report on January housing starts said today. Builders broke ground on 222,700 units in January, a big rebound from December, Canada Mortgage and Housing Corp. said.
Among provinces, Alberta, British Columbia and Newfoundland and Labrador saw record employment rates last month while Quebec's jobless rate fell to a 33-year low of 6.8 per cent.
Tight labour markets continue to underpin wage growth. Average hourly wages were 4.9 per cent higher than a year ago, the second month in a row that it's been the highest in at least a decade. January marked the sixth straight month with an increase in hourly wages at or above 4 per cent, the report said.
Statscan revised previous numbers to smooth out seasonal bumps. As a result, December's job losses are estimated at 2,900 jobs rather than the 18,700 that was originally reported.
Economists had expected just 10,000 new Canadian jobs with the jobless rate remaining at 6 per cent. January's 5.8-per-cent jobless rate matched levels last seen in October.
The biggest employment gains in January were among women aged 55 and over and men aged 25 to 54.
Older workers are flocking to the work force. Employment has increased 10 times faster among older workers than among middle-aged workers “owing in part to the growth of this group within an aging Canadian population and in part to the steady rise in their employment rate since 1997,” Statscan noted.
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