OTTAWA (Reuters) – Canada’s unemployment rate unexpectedly fell and the economy posted another solid month of job gains, data showed on Friday, in signs that joblessness was started to ease.
In January, the unemployment rate was 6.6%, a notch below the 6.7% seen in the prior month and the economy added a net of 76,000 jobs, slightly down from a revised 91,000 job additions in December, but still a robust gain.
Analysts polled by Reuters had forecast net additions of 25,000 jobs in January and the unemployment rate at 6.8%.
This was the second month in a row that the unemployment rate, or the number of jobless people as a percentage of the total labor force, declined. Although the total number of unemployed people stayed at a high of 1.5 million.
“This indicates that many unemployed people are facing continued difficulties finding employment, despite recent employment growth,” Statscan said.
Canada’s economy has been teetering for most of last year as large interest rates cuts failed to boost consumer spending and business investment.
However, the central bank said last month that while the job market remained soft, there were signs of improvement as a total of 200 basis point of quick rate cuts was helping business activity to pick up and boosting consumer spending.
A looming threat of tariff from the U.S. and a sharp drop in immigration numbers, however, are likely to impact economic activity, and businesses have reported soft hiring intentions for the year, a Bank of Canada survey showed last month.
The number of job additions were largely balanced between part-time and full-time positions, Statscan said, adding that the gains were primarily seen in manufacturing, professional, scientific and technical services.
Employment amongst youth or those in the age group of 15 to 24, a category which had been chronically weak most of last year with high unemployment rate, increased by 1.1%. the unemployment rate in this category dropped to 13.6% from 14.2%, Statscan said.
The average hourly wage growth for permanent employees was at 3.7%, slightly down from the revised 3.8% in December. The wage growth rate, which is closely watched by the BoC to gauge inflationary trends, had been slowing.
The employment rate, or the proportion of the population aged 15 and older who are employed, increased 0.1 percentage points to 61.1% in January, marking the third consecutive monthly increase, Statscan data showed.
(Reporting by Promit Mukherjee; Editing by Dale Smith)
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