Ottawa-Gatineau’s unemployment rate dipped slightly to 4.3 per cent in January from 4.4 per cent in December despite a drop in the number of people who were working last month, Statistics Canada says.
Employers in the region had a total of 786,500 workers on their payrolls last month, down 12,600 from December, the agency said Friday in its monthly labour force survey.
But because the size of Ottawa-Gatineau’s labour force – which includes people who are looking for work – shrank by more than 14,000, the jobless rate actually fell.
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The declining job numbers came despite gains from two of the region’s leading employers in January. The tech sector added 1,000 positions to employ a total of 43,700 workers, while the public service boosted its ranks by about 1,600 people to employ a total of 180,200 residents in Ottawa-Gatineau.
Still, those gains were nowhere near enough to offset job losses in almost every other subsector of the local economy.
The biggest drops were in health care, which shed 4,700 jobs, and construction, which employed 4,000 fewer workers than in December. Only education, which added about 1,200 jobs, and accommodation and food services, which grew by 400 positions, made gains among the region’s other major subsectors.
Nationally, the Canadian economy added 34,500 jobs in January, fuelled by gains in the manufacturing, construction and agriculture industries, Statistics Canada said.
The increase in jobs came as the unemployment rate fell to 5.5 per cent compared with 5.6 per cent in December, according to the monthly labour force survey.
Economists on average had expected an increase of 15,000 jobs for January, according to financial markets data firm Refinitiv.
Bank of Montreal chief economist Doug Porter said underlying job growth appears to be on track after a brief scare late last year, and conditions remain tight.
“While the Bank of Canada is clearly on high alert over the potential economic implications of the new coronavirus, recent indicators suggest the economy had decent underlying momentum at the start of the year,” Porter said.
The Bank of Canada kept its key interest rate target on hold last month at 1.75 per cent, but left the door open to future rate cuts if weakness seen in the economy at the end of last year is more persistent than expected.
Porter said that if the economy does start to weaken due to the new coronavirus, he expects the Bank of Canada will move, but that the latest job numbers likely give the central bank a measure of comfort.
He added that average hourly wages in January were up 4.2 per cent compared with a year ago.
“This labour force report is very consistent in suggesting that there is some serious wage pressures building, which frankly you would expect given an unemployment rate of 5.5 per cent,” he said.
Average hourly wage growth is one of several measures watched by the Bank of Canada, which aims to keep inflation in check.
The job growth in January was powered by the goods-producing sector as it gained 49,100 jobs. The manufacturing group added 20,500 jobs for the month, while the construction subsector added 15,800. Agriculture added 11,500.
Meanwhile, the services-producing sector lost 14,500 jobs, weighed down by the loss of 16,000 jobs in the health care and social assistance subsector.
The gain in jobs for the month came as the number of full-time jobs rose by 35,700, while part-time employment fell by 1,200.
Regionally, Quebec added 19,100 jobs in January, while Manitoba added 6,500 jobs. New Brunswick added 4,600. The number of jobs fell by 18,900 in Alberta.
CIBC senior economist Royce Mendes said the January jobs report built on a gain in December, suggesting that maybe the labour market rebounded from weakness around the turn of the year.
“That said, other indicators of the economy, in particular consumption, have looked soft. So the picture remains decidedly mixed,” Mendes wrote in a report.
“We’ll need to wait for the to-be-released payroll data to confirm the strength in hiring, and some of the activity indicators to see how persistent the slowdown in spending is.”
Compared with January 2019, the number of jobs in Canada increased by 268,000, or about 1.4 per cent.
– With files from the Canadian Press
