January Unemployment Falls to 6.5% Despite 25,000 Job Losses: StatCan Reports
In January, Canada experienced a reduction of 25,000 jobs; however, the unemployment rate declined to 6.5%. This decrease is attributed to a reduction in the number of individuals actively seeking employment, according to Statistics Canada (StatCan).
Overview of Job Losses in January
Most of the job losses occurred in the private sector, particularly affecting part-time positions. Women aged 25 to 54 were significantly impacted. Ontario faced the brunt of these losses, especially within the manufacturing sector.
- Manufacturing jobs decreased by 28,000 in January.
- Year-over-year, the sector has lost approximately 51,000 jobs, partly due to U.S. tariffs.
- Other sectors experiencing job cuts included education and professional, scientific, and technical services.
Gains in Certain Industries
Despite the declines in several areas, there were notable gains in the following sectors:
- Information, culture, and recreation
- Business, building, and other support services
These gains helped to partially offset the significant job losses recorded in January.
Trends in Wages and Labor Force
The average hourly wage increased by 3.3% compared to the previous year, although this was slightly lower than December’s figures. January marked the first instance of net job loss since August.
The unemployment rate fell from 6.8% in December, primarily due to fewer job seekers. StatCan reported a 119,000-person decline in the labor force, marking the largest decrease in five years.
Youth Employment Insights
Young workers aged 15 to 24 saw their unemployment rate drop by half a percentage point, with fewer seeking jobs. Additionally, there was a 2.2 percentage point rise in younger individuals identifying school as their main activity compared to the previous year.
Future Employment Projections
Recent surveys indicate a rising number of workers in U.S. trade-dependent industries contemplating career changes. Approximately 5.4% of permanent core-aged employees in these sectors intend to leave their positions within a year, an increase of 1.5 percentage points from last year.
Bank of Canada Governor Tiff Macklem has suggested that the recovery in the labor market will be uneven, with disparities in growth among various sectors. Currently, the benchmark interest rate is held steady at 2.25%, with the next review scheduled for March 18.
Conclusion
TD Bank senior economist Andrew Hencic remarked that the falling unemployment rate, despite job losses, indicates a labor market that is more resilient than anticipated. However, he noted that more economic data is needed before any adjustments to monetary policy are considered.
This report encapsulates the January employment landscape in Canada as analyzed by StatCan and recognized by various economic experts.
