The National Capital Region’s unemployment rate was 4.6 per cent for the third consecutive month in January as local employers added just 400 new jobs to their payrolls, Statistics Canada said Friday.
Ottawa-Gatineau’s labour force – which includes unemployed people who are actively seeking work – remained the same size as the previous month.
The tech industry, a key driver of the local economy, was among the sectors that posted job gains in January.
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Statistics Canada’s latest jobs market survey said the three-month rolling average number of workers employed in the information and communication technology sector in the National Capital Region was 65,700 last month, up from 64,400 in December.
The number of tech employees in Ottawa-Gatineau has risen 12.5 per cent since January 2023, according to the agency.
Meanwhile, the public sector also grew slightly in January.
Statistics Canada said the rolling average of workers employed in public administration in the region rose to 194,400 last month, up from 193,300 in December.
National jobless rate falls to 5.7%
The Bank of Canada will be in no rush to cut interest rates after Statistics Canada reported a larger-than-expected employment gain across the country last month, economists say.
The federal agency said the economy added 37,000 jobs in January after several months of relatively no change in employment.
Canada’s unemployment rate fell to 5.7 per cent last month, marking the first decline since December 2022.
“I would classify the labour market as tighter-than-expected, but not necessarily stronger-than-expected,” said Andrew Grantham, CIBC’s executive director of economics.
“That’s because, yes, employment continued to rise a little bit faster than the consensus expected. But it really paled in comparison with the big increase in population.”
Canada’s population of people aged 15 and older grew 0.4 per cent between December and January, far surpassing the 0.2 per cent growth in employment.
The labour market cooled significantly in 2023 as high interest rates weighed on consumer spending and business investment, pushing the unemployment rate up from 5.1 per cent in April to 5.8 per cent in December.
While there were some weaker elements to the job report, the relatively decent state of the labour market suggests to economists that the central bank can take its time when it comes to cutting interest rates.
“Today’s data is certainly not going to speed up the timeline for the Bank of Canada,” Grantham said.
CIBC is not changing its forecast on timing for the first rate cut as it still anticipates the central bank will lower its key rate starting in June. But it now expects the bank will cut rates by less overall this year.
Employment rose across several sectors in January, led by wholesale and retail trade as well as finance, insurance, real estate, rental and leasing.
Meanwhile, accommodation and food services saw the largest decline in employment.
Workers’ wages continued to grow rapidly last month as Canadians seek compensation for past inflation. Average hourly wages, which have been consistently growing at a four to five per cent annual pace, rose 5.3 per cent from a year ago.
Statistics Canada says wage growth has been stronger for women and high-income earners. Although men continue to earn more than women on average, average hourly wages for women rose 6.2 per cent compared with 4.4 per cent for men.
For employees in the top 25 per cent of the wage distribution, their wages grew 5.9 per cent compared with 4.6 per cent for those in the bottom 25 per cent.
Canada’s labour market has been supported by strong population growth, driven by permanent and temporary immigration.
Compared with a year ago, the economy added 345,000 jobs, while the working-age population expanded by one million people.
As the Bank of Canada maintains its key interest rate at five per cent, economists’ forecasts suggest unemployment will rise throughout this year.
– With additional reporting from the Canadian Press
