Canada delivers biggest job drop since 2009

The vigour that carried the Canadian labour market on its impressive run in 2017 hit a speed bump to start this year with its largest one-month job drop in nine years.

The economy lost 88,000 positions — all of them part time — in January for its biggest employment decline in a single month since 2009, Statistics Canada’s latest jobs survey revealed Friday.

The dip helped push the national unemployment rate up to 5.9 per cent, from a revised 5.8 per cent the previous month.

The decrease was driven by the loss of 137,000 part-time positions, including more than 59,000 in Ontario. It was the biggest one-month collapse in part-time work since the agency started gathering the data in 1976.

For Ontario, some experts raised the possibility of a link between the provincial drop and the introduction last month of a controversial minimum-wage hike.

To partially offset the declines, Statistics Canada said the economy added 49,000 full-time positions last month. The survey also detected stronger wage growth in January of 3.3 per cent, which also led some to point out possible connections to Ontario.

However, several experts made sure to note that before trying to draw conclusions from the January report, one should consider the well-known monthto-month volatility in the jobs figures.

“The Canadian economy experienced a very large setback in January ... but it also needs to be kept in perspective — we had outstandingly strong job growth over the course of last year,” Craig Alexander, chief economist for the Conference Board of Canada, said in an interview.

“Quite frankly, we were overdue for a bad number.”

Despite Canada’s healthy economic performance last year, Alexander said the surprising pace of job creation had been stronger than the other data. He said the losses reported Friday brought the monthly jobs average more in line with the other economic numbers.

“I don’t think that the January number is the start of a whole series of declines — I think it’s more of a reflection of the fact that we were tracking abnormally strong numbers behind us,” Alexander said.

When it comes to the Bank of Canada’s possible reaction to the January report, Alexander noted the “bad number” could delay the timing of governor Stephen Poloz’s next rate hike. Poloz has repeatedly said future rate decisions will be highly data dependent.

Others didn’t expect the January report, on its own, to have a significant impact on the outcome of the Bank of Canada’s next rate announcement.

CIBC chief economist Avery Shenfeld said he thought it probably leaves Poloz right where he was before the survey results came out.

“This is a mixed bag for the Bank of Canada because we did see a significant rise in wage inflation ... which might counter the disappointment on the headline jobs count,” Shenfeld said.

Even with the decline, Canada has had a strong run of job creation that’s generated 414,100 full-time jobs over a 12-month period. The growth represents an increase of 2.8 per cent.

Over that same period, the number of part-time positions fell by 125,400 for a contraction of 3.5 per cent.