Canada: Slump in employment but details not overly worrisome - NBF

According to National Bank of Canada’s analyst, Matthieu Arseneau, the labour market remains very tight in Canada despite the slump reported in January. 

Key Quotes:

“Canadian employment slumped 88K in January according to the Labour Force Survey. This decline was accounted by a 137K plunge in part-time jobs as full-time employment was actually up 49K on the month. The drop in headcounts led to a one-tick increase in the unemployment rate to 5.9%, an increase that was partially offset by a three ticks decline in labour force participation (to 65.5%).”

“The longest streak of consecutive monthly increases since 2000 (17 months) came to an end abruptly in January with the sharpest monthly drop since 2009. The details of the report, however, are not overly worrisome.”

“Full-time employment posted another impressive performance. As a result, the Canadian labour market generated a massive 278K gain in full-time employment over the past five months. The massive loss of part-time jobs in Ontario (59K of which 24K among youth) is coinciding with the 20% rise minimum wage that took effect this January. Time will tell if this is temporary weakness or a reflection of structural adjustments made by corporations.”

“All in all, the labour market remains very tight as shown by a 6-month annualized jump of 4.8% in hourly earnings. Full-time job creation suggests that the economy remains on solid ground.”