Economy rejoices as Statistics Canada announces over twice as many jobs added in January as expected

The data for employment change in Canada in January came surprisingly well for the economy on Friday. Statistics Canada revealed the country to have added over two times the number of jobs as compared to what the analysts had expected in January. Friday’s data, as per economists, is sufficiently supportive of the Canadian economy to convince the central bank to avoid a rate cut in the upcoming month.

In its announcement on Friday, Statistics Canada revealed that 34,500 new jobs were created in January that marked the second month in a row for a largely optimistic reading on employment change. New jobs added in November were previously posted at a record low. January’s data also highlighted the unemployment rate in Canada to have dropped to 5.5% that is close to approaching an all-time low.  

Analysts Had Expected The Unemployment Rate At 5.6% In January

In an estimate, analysts had expected Canada to create 16,300 new jobs in January. The estimate for the unemployment rate was capped at 5.6%.

The Bank of Canada (BoC) has been successful in sidestepping a rate cut since October 2018. In its policy meeting in January, however, lawmakers had hinted at a prospect of monetary policy leniency if domestic growth failed to pick up in the upcoming months. The next policy announcement by the BoC is scheduled for March 4^th.

The market expectations concerning lower interest rates in March were previously highlighted at 12.89%. Following Friday’s economic data, the expectations dropped to 10.89%, as per the data from overnight index swaps markets.

Statistics Canada further highlighted the gain in new positions in January to be attributed to the full-time jobs entirely. The goods-producing sector was reported to have contributed 49,100 new jobs with around 50% of them ascribed to the manufacturing sector. The service sector, on the other hand, added 14,500 positions in January.

Hourly Wages Improved By 4.4% In January Versus December’s 3.8%

Hourly wages paid to the permanent employees is a prominent indicator for the Bank of Canada. In January, the indicator posted a 4.4% improvement as compared to December’s 3.8%.

The Canadian dollar was seen gaining traction in the forex market after the release of the economic data on Friday. The Canadian dollar initially surged to 1.3284 from 1.3314 against the greenback on Friday. Later in the day, however, much of the gain was lost with the currency pair falling back to around the original level of 1.3314.