Posted at 9:00 a.m.
The labor market should recover quickly from the weakness of January, which ended with job losses and a rise in the unemployment rate in Canada and Quebec.
“Employment and the number of hours worked should rebound in February,” predicts economist Benoit Durocher of Desjardins.
At the National Bank, economists Matthieu Arseneau and Alexandra Ducharme are of the same opinion. They point out that companies’ hiring intentions peaked in December. “This suggests a rapid recovery, especially since the sanitary measures have already started to be relaxed”, they believe.
Even bad, the picture of the labor market in January should not prevent the Bank of Canada from starting to raise interest rates, as it expects, believe most economists.
“The Bank of Canada knew January’s labor market statistics would be poor when it announced its intention to raise rates,” said Royal Bank economist Nathan Janzen.
Unemployment at 5.4% in Quebec
Statistics Canada reports a decrease of 200,000 jobs in Canada in January, and an increase of 0.5 points in the unemployment rate, to 6.5%. This is the first increase in the unemployment rate since April 2021.
Job losses were concentrated in Quebec and Ontario, where stricter health measures were imposed at the end of December.
In Quebec, where a curfew was imposed at the end of December, employment fell by 63,000, the first significant drop in a year. The unemployment rate increased by 0.7 points to reach 5.4%.
Among the lowest unemployment rates in Canada are in the metropolitan areas of Quebec (3%) and Sherbrooke (2.8%). In the Montreal metropolitan area, the unemployment rate is 5.8%, up 0.8 points.
Ontario lost 147,700 jobs in January, and the unemployment rate rose from 6.1% in December to 7.3% in January.
Nationally, but mainly in Quebec and Ontario, job losses are concentrated in accommodation and food services, which are the sectors most affected by health restrictions.
According to the National Bank, 96.2% of the 200,000 jobs lost in Canada in January are related to the sectors most affected by health measures.
Long-term telecommuting
Statistics Canada’s monthly survey took place from January 9 to 15. During this period, an abnormally high number of respondents said they were working from home, due to health measures. More than four in ten workers worked from home that week.
However, working from home is becoming a way of life for a growing number of Canadians, who work from home full time. “For a quarter of Canadians, working from home has become a long-term way of working,” says Statistics Canada in its report.
The agency also asked Canadians whether they plan to leave their jobs in the next 12 months and, if so, why.
Only 7.3% of respondents said they wanted to leave their job to find a better one. Low pay, high workload and the inability to work from home are the reasons given by those who want to change jobs.
Strong job rebound in the United States
The US economy added 467,000 jobs in January, a number well above expectations, indicating that the labor market has weathered the impact of the Omicron variant. According to the US Department of Labor, job gains are in the leisure and hospitality, business services and logistics sectors. The unemployment rate rose slightly, to 4%, because some of those who had left the labor market returned to it. The participation rate thus rose from 61.9% in December to 62.2% in January. This is the second month in a row of strong job creation in the United States, after an increase of 510,000 in December. As in Canada, the US Federal Reserve has indicated its intention to raise its key rate, which could happen in the spring.
Helen Baril, The Press