Canada sees employment growth in January, led by manufacturing sector

On Friday, Canada’s labor market exhibited continued strength as employment increased by 76,000 jobs, or 0.4%, in January. This uptick in jobs also nudged the employment rate up slightly to 61.1%. The unemployment rate saw a modest decline, dropping 0.1 percentage points to settle at 6.6%.

The increase in employment was spread across several demographics. Youth aged 15 to 24 saw a 1.1% rise in jobs, while core working-age individuals, both women and men aged 25 to 54, experienced gains of 0.5% and 0.4%, respectively. Notably, the manufacturing sector led the way with the addition of 33,000 jobs, a 1.8% increase, and professional, scientific, and technical services also contributed with 22,000 new roles, marking a 1.1% rise.

Regional employment figures varied, with Ontario, British Columbia, and New Brunswick (NYSE:BC) all reporting job growth, while other provinces remained largely unchanged. Furthermore, Canadians saw a 3.5% year-over-year increase in average hourly wages, although this growth decelerated compared to previous months.

The trend of rising employment continued for the third month in a row, following gains in November and December. This period saw significant increases in both full-time and part-time work. The private sector added 57,000 jobs in January, contributing to a 1.6% year-over-year increase in private sector employment. Public sector employment remained stable, but self-employment rose by 27,000 in January, showing a 3.6% increase from the previous year.

The unemployment rate’s slight decrease was particularly evident among the youth demographic, while rates for core-aged men and women remained steady. However, unemployment rates among racialized youth, such as South Asian and Chinese Canadians, were higher compared to the previous year.

Wages saw a year-over-year increase, with average hourly earnings rising to $35.99, though the pace of wage growth has slowed compared to previous months. Different industries experienced employment gains, with manufacturing, construction, and professional services all showing positive movement in January.

In Ontario, job growth was notable, and British Columbia also saw employment rise for the second consecutive month. New Brunswick’s employment figures improved, and Quebec’s employment remained stable compared to the previous month.

The report also highlighted a decrease in the number of workers planning to leave their jobs, potentially indicating a shift towards job stability in the face of cooling labor market conditions. In the manufacturing sector, which is significantly tied to U.S. demand for Canadian exports, employment made up 8.9% of Canada’s total employment, with a larger percentage of full-time and permanent positions compared to the national average across all industries.

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