Canada's jobless rate dipped to 5.8 per cent in January, as the economy churned out a greater-than-expected 46,400 jobs, Statistics Canada said Friday.
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The unemployment rate matches the 33-year low set last October.
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Economists had expected only 10,000 new jobs to be added last month and were forecasting a jobless rate of six per cent.
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The report led to an immediate spike in the value of the Canadian dollar. The loonie had been at 99.20 cents US just before the release of the employment figures. It jumped above parity right after the report came out and was trading at $1.0004 US just after 2 p.m. ET, a jump of 1.11 cents US.
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Statistics Canada also revised December's job loss figure from a very weak 18,700 to just 2,900.
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"Today's upbeat jobs data lend some heavy-duty weight to the view that the Canadian economy is faring better than its U.S. counterpart," said BMO Capital Markets economist Doug Porter.
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"The sturdy jobs picture casts some serious doubt on just how fast the Bank of Canada will cut in the near-term - at the end of the day, the jobless rate is at a cycle low and wage growth is at a cycle high, so where's the urgency to cut rates?"
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Porter changed his forecast of a half-point cut in the central bank's key rate on March 4 to a quarter-point cut.
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CIBC World Markets economist Avery Shenfeld agreed that this report will "make it harder" for the Bank of Canada to cut by half a percentage point.
But TD said it still expects the bigger rate cut.
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"We expect that this report was more of a blip than a sign of a renewed strength in Canada's labour market," said TD economist James Marple.
Wages rising at twice inflation rate
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Hourly wage growth continued at a vigorous pace in January, increasing by 4.9 per cent year-over-year. That's more than double the annual inflation rate of 2.4 per cent.
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Alberta again had the lowest provincial jobless rate at 3.2 per cent as it added 6,100 jobs.
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Eight provinces added jobs last month; only New Brunswick and Nova Scotia lost. Quebec gained 7,200 jobs - enough to bring its jobless rate down to 6.8 per cent, a 33-year low.
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January's job gains came in a variety of industries, with professional, scientific and technical services, construction and finance leading the way.
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The usually weak manufacturing sector managed to add 17,500 jobs last month. But over the last year, it has still shed 113,400 positions.
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Those jobs gains were offset by losses in information, culture and recreation, natural resources and trade.
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Statistics Canada said January's job growth was entirely a result of increases in full-time employment, as the number of part-time jobs actually fell.
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The private sector was responsible for all of the job growth as the number of public sector and self-employed workers dropped.