Canada’s labour market surprisingly expanded at a much faster pace than expected last month, in the latest sign that the Bank of Canada’s aggressive rate hikes just aren’t cooling the economy as fast as policy makers are hoping for.
Latest data from Statistics Canada shows that Canada’s economy added an additional 150,000 jobs in January, keeping the unemployment steady at 5%. The majority of last month’s employment gains were concentrated in full-time work, and driven by the core-aged population, as well as adults above 55 years old.
Total hours worked also increased 0.8% on a monthly basis in January, to a 5.6% gain from one year ago. However, average hourly wage growth slumped to an annualized 4.5% last month, slightly below December’s gain of 4.8%.
The latest figures are likely going to be dismal news for the Bank of Canada, which has raised borrowing costs from near-zero to 4.5% in 11 months, before signalling a pause last month to allow the aggressive rate hikes to cycle through the economy. Consensus forecasts were calling for an employment gain of only 15,000 jobs, while markets were expecting less than a one-in-ten chance of another rate increase next month.
Information for this briefing was found via Statistics Canada and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.