Canada adds a robust 150,000 jobs in January as wage growth eases
REAL ECONOMY BLOG | February 10, 2023
Authored by RSM Canada
The Canadian labor market continued to blow past expectations, adding 150,000 jobs in January despite mounting recession concerns, Statistics Canada reported on Friday.
Robust job gains combined with the unemployment rate holding steady near a record low at 5% should push the expectations of a recession—even a mild one—on hold, or at least push them to the second half of the year.
The report also helped to increase the chance of a soft landing, which had been around 25% in our base case before the release.
One important factor was the downshift in wage inflation. Wage growth plunged for the second month in a row, down to 4.5% year over- year from 5.5% in November. That matched the Bank of Canada’s policy rate of 4.5%.
We expect wage growth to slow further as the economy cools off, giving enough room for the policy rate to be sufficiently restrictive.
Another encouraging sign in Friday’s report was that some of the decline in wage growth was driven by the increase in the labor supply. The participation rate rose 0.3 percentage points in January to 65.7%.
The data suggests that most workers who came back to the labor market could find jobs right away, keeping the unemployment rate even in January. Also, those were good full-time jobs, which increased by 121,100 on the month. Part-time job gains were 28,900.
On the industry level, employment gains came mostly from service industries like trade, health care and education.
As strong as January’s job increase was, that number will most likely be revised downwardly when the February report comes out. December’s revision was quite significant, reducing the gains from 104,000 to 69,200. Still, that bolsters the case for a soft landing even more.
Call us at (519) 426-5160 (Simcoe) or (519) 842-4246 (Tillsonburg) or fill out the form below and we'll contact you to discuss your specific situation.
This article was written by Tuan Nguyen and originally appeared on 2023-02-10 RSM Canada, and is available online at https://realeconomy.rsmus.com/canada-adds-a-robust-150000-jobs-in-january-as-wage-growth-eases/.
RSM Canada Alliance provides its members with access to resources of RSM Canada Operations ULC, RSM Canada LLP and certain of their affiliates (“RSM Canada”). RSM Canada Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM Canada. RSM Canada LLP is the Canadian member firm of RSM International, a global network of independent audit, tax and consulting firms. Members of RSM Canada Alliance have access to RSM International resources through RSM Canada but are not member firms of RSM International. Visit rsmcanada.com/aboutus for more information regarding RSM Canada and RSM International. The RSM trademark is used under license by RSM Canada. RSM Canada Alliance products and services are proprietary to RSM Canada.
Good Redden Klosler a proud member of the RSM Canada Alliance, a premier affiliation of independent accounting and consulting firms across North America. RSM Canada Alliance provides our firm with access to resources of RSM, the leading provider of audit, tax and consulting services focused on the middle market. RSM Canada LLP is a licensed CPA firm and the Canadian member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.
Our membership in RSM Canada Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise, and technical resources.
For more information on how Good Redden Klosler can assist you, please call us at (519) 426-5160 (Simcoe) or (519) 842-4246 (Tillsonburg).