Canada adds 35,400 jobs, jobless rate at 6.6%

Yorkregion.com
Feb. 6, 2015
By Andy Blatchford

The Canadian job market rode a wave of gains in part-time work last month as it beat modest forecasts and appeared to keep the expected oil-slump fallout at bay a little longer.

But the undercurrent in Friday's Statistics Canada data, which showed 35,400 net new jobs last month, also contained disappointing signs for the economy.

For one, the report found the economy lost 11,800 full-time positions last month. In addition, the overall number of jobs for paid employees - any full- or part-time worker who was not self employed - fell by 5,700.

The decreases cast a shadow over the agency's findings that the unemployment rate had dipped to 6.6 per cent thanks to 47,200 new, yet less desirable, part-time positions.

The gloomier details in the report reinforced economist predictions the Bank of Canada is preparing to cut its key interest rate next month by another quarter percentage point. They expect such a move would be described as adding another pillow to absorb the anticipated blow of falling oil prices.

Last month, the central bank lowered its trend-setting rate from one per cent to 0.75 to help offset the "unambiguously negative" economic effects of cheaper crude.

"It's not the greatest type of job growth," TD Bank economist Leslie Preston said of Friday's report, referring to the boost in the part-time and self-employment categories.

"We think this sort of sets the tone for the coming loss in momentum in the Canadian job market."

Preston believes the latest labour figures will feed the central bank's concerns that many part-time workers are struggling to find full-time employment. The Statistics Canada survey considers someone part-time if they work less than 30 hours per week at their primary job.

The coming oil-patch slowdown is also expected to pile more stress on the job market, Preston added.

The January increase, which included 41,100 self-employed positions, helped push the jobless rate down from 6.7 per cent.

The unemployment rate was 0.1 per cent lower than the projection of economists, who had also forecasted a net addition of 4,500 jobs, according to Thomson Reuters.

By sector, the natural resources industry dropped 8,800 jobs in January - with Ontario losing 6,400 of those positions - while the number of jobs in professional, scientific and technical services increased by 22,400.

Among the provinces, Quebec, New Brunswick, Prince Edward Island and resource-rich Alberta all had net job increases.

Jimmy Jean, a senior economist with Desjardins Capital Markets, was surprised Alberta added 13,700 positions following recent layoffs blamed on the slide in oil prices.

"That's very counter-intuitive knowing the headlines that are coming out of the province," said Jean, who added it was difficult to explain the jump because much of the gain came in the "other services" category.

Saskatchewan took the biggest hit, losing 8,400 jobs and watching its unemployment rate swell to 4.5 per cent from 3.7 per cent.

The Statistics Canada report also found the country's labour-force participation rate was 65.7 per cent, unchanged from December. The number, however, hovered around its lowest level since July 2000 when it hit 65.6 per cent.

Therefore, the January unemployment rate's decline to 6.6 per cent doesn't necessarily point to a healthier job market, Jean said.

"It means that more people are dropping out of the labour force, perhaps out of discouragement," he said.

The report also showed the youth unemployment rate moved down by 0.7 percentage points last month to 12.8 per cent and that 30,300 more young people had work compared to a year earlier. The participation rate for youth fell to 64.3 per cent from 64.6 per cent in December.

By gender, the agency found 34,500 more women between the ages of 25 and 54 were working last month, while 6,000 fewer men in the same age bracket were employed.

Over the 12 months leading up to January, Canada gained 127,600 jobs - a total that included 107,800 full-time positions and 19,900 part-time jobs.

On Friday, Statistics Canada also released its latest data for building permits, which showed the total value climbed in December by 7.7 per cent to $7.1 billion.