January 2024 Brings a Year-on-Year Job Surge of 345,000 in Canada
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January 2024 Brings a Year-on-Year Job Surge of 345,000 in Canada

Austin Campbell

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Job Surge

The employment landscape witnessed a remarkable turnaround in January 2024, adding an unexpected 37,000 Canadian jobs and marking the first decline in the unemployment rate since December 2022. This surprising surge, surpassing analyst predictions, provides a beacon of hope for the nation’s economic recovery.

The gains in January were predominantly fueled by an increase in part-time jobs in Canada, surpassing the conservative estimate of 10,000 jobs predicted by RBC. Contrary to expectations of a rise to 5.9%, the unemployment rate instead dropped to 5.7%, reflecting a resilient job market.

Statistics Canada Report

Statistics Canada’s released data detailed employment gains across various industries, particularly in the services-producing sector. Noteworthy increases were observed in:

  • Wholesale and retail trade: 1.1% employment gain
  • Finance, Insurance, Real estate, Rental, and leasing: 2.1% employment gain
  • Educational services: 1.8% employment gain
  • Transportation and warehousing: 1.9% employment gain
  • Business, Building, and other support services: 1.3% employment gain

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Persons Not in the Labour Force (Jan 2023 – Jan 2024)

  • Main activity: Caregiving and household work, and other reasons
  • Percentage increase: 4.4%
  • Percentage of the labor force: 7.5%
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Breaking down the data regionally, employment saw positive shifts in Ontario (1.1%), Newfoundland and Labrador (3.2%), Manitoba (1%), and Nova Scotia (0.7%). In contrast, Saskatchewan witnessed a slight decline of one percent.

Canadian ProvincesEmployment Rate
Ontario1.1%
Newfoundland and Labrador3.2%
Manitoba1.0%
Nova Scotia0.7%

Hourly wages in January exhibited a robust increase of 5.3% on an annualized basis, following a 5.4% gain in December. The breakdown by demographics revealed a faster pace of wage growth for women (6.2%) compared to men (4.4%). Both youth and core-aged employees experienced similar growth rates, while individuals aged 55 and older saw a more moderate increase.

Employment Rate by Gender and Age

GenderAge GroupEmployment Rate
Men25 to 5487.2%
Women25 to 5481.1%
Men15 to 2456.0%
Women15 to 2456.0%

Jobs in Canada – The Bank of Canada’s Perspective

The unexpected Canadian jobs rise prompts a closer look at its implications for rate cuts. The Bank of Canada has consistently emphasized that annual wage hikes of four to five percent are inconsistent with taming inflation without corresponding gains in productivity. This raises questions about the central bank’s approach to maintaining economic stability.

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The January job gain aligns with a StatCan report from the previous month, hinting at signs of life in Canada’s economy at the end of 2023. With real gross domestic product rising by 0.2% in November, particularly in goods-producing sectors, the country experienced its first month of growth since May 2023.

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Despite challenges posed by high interest rates, early signs of growth suggest that Canada’s economy potentially avoided a technical recession in the fourth quarter of 2023. Economists anticipate continued weak growth in the first half of the year, with a more robust rebound expected in the second half of 2024.

Expert Insights

Experts, including Douglas Porter, chief economist at BMO, highlight the key takeaways from Canada’s jobs report. A substantial job gain, a decline in the jobless rate, and persistent five percent wage growth indicate a resilient economy. This sentiment suggests that the Bank of Canada may maintain a patient policy stance rather than rushing into rate cuts.

Nathan Janzen, assistant chief economist at RBC, notes that the increase in hours worked aligns with early signs of economic growth in 2024. The flexibility provided by stronger-than-expected economic data allows central banks to exercise patience before easing off monetary policy brakes. The unexpected surge of jobs in Canada surge in January 2024 paints a positive picture of the nation’s economic recovery. With positive shifts in various job sectors and regions, coupled with robust wage growth, the Canadian job market positions for a promising start to the year.

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