The Canadian labour market is showing no signs of slowing despite forecasters expecting high interest rates to weigh on jobs numbers.
Statistics Canada’s latest labour force survey released Friday showed that the economy added a whopping 150,000 jobs in January.
Meanwhile, more Canadians were working or looking for work as 153,000 people joined the labour force.
Royce Mendes, Desjardins’ head of macro strategy, said strong job numbers suggest interest rates are either not high enough or haven’t had enough time to affect the economy more broadly.
“At this point, it’s unclear what the appropriate reaction from the Bank of Canada is. But it certainly raises the odds that they may have to reengage with rate hikes this year,” Mendes said.
With the job market still tight, the country’s unemployment rate held steady at five per cent, hovering just above the record low of 4.9 per cent reached in the summer.
The Canadian economy has been on an upward trend with employment since September, adding a total of 326,000 jobs.
That’s despite forecasters anticipating the higher cost of borrowing will slow the economy down significantly this year and affect employment levels.
At its Jan. 25 decision, the central bank indicated that it plans to stop raising interest rates for now, allowing time for higher interest rates to work their way through the economy.
But the Bank of Canada stressed the pause was conditional, leaving the door open for more rate hikes if inflation proves to be stubborn.
In January, Statistics Canada said job gains were made across sectors in the economy. Wholesale and retail trade experienced the largest gains to employment, adding 59,000 jobs, followed by 40,000 jobs added in health care and social assistance.
Most jobs added to the economy were full-time, while people aged 25 to 54 drove the gains.
On Twitter, premier Scott Moe was quick to point out numbers from this latest report. He says the numbers show 16,400 jobs were created in Saskatchewan between January 2022, and January 2023 claiming Saskatchewan has the third lowest unemployment rate in the country.
The NDP disagree. In a release, the NDP say since Scott Moe became premier, Saskatchewan ranked dead last in total job creation, and dead last in full-time job creation among provinces.
“Under Premier Scott Moe, the Sask. Party has the worst job creation record among all the provinces over the last five years, a fact that was confirmed again today,” said Beck. “What we need is an all-of-the-above approach to job creation to build opportunities and create good-paying jobs for years to come.”
–With files from the Canadian Press–