Canada added 45,600 payroll employees in January, a solid rebound after December’s 10,600 decline. It contrasts with the more-widely viewed LFS survey, which showed a 25K decline in January followed by an 84K decline in February. On a year-over-year basis, payroll employment was up by 33,500 (+0.2%) in January despite a decline in the population.
This report show growth but also some weakness below the surface. Educational services drove the bulk of the gain at +20,000, which could be a seasonal distortion after a cumulative 23,400 decline from August to December. Strip that out and you’re looking at a much more modest increase. Construction continued its quiet run of strength with +8,100, extending a trend that’s added nearly 24,000 jobs since July. Finance and insurance chipped in +6,600 after back-to-back monthly losses.
The soft spot remains retail trade, which shed 6,600 positions in January and is now down nearly 30,000 year-over-year. Clothing retailers, grocery stores, and department stores are all bleeding headcount, and there’s no sign of a turnaround. That’s a consumer-facing signal worth watching and this week, Canadian retailer Dollarama offered disappointing guidance.
On wages, average weekly earnings rose 2.02% year-over-year to $1,320 — essentially flat from December’s 1.94% pace. Nothing alarming for the Bank of Canada on either side of the mandate but with energy prices surging, there are problems to come and the market is pricing in a hike later this year.
The vacancy data tell a cautious story. There were 492,400 open positions in January, basically unchanged from December but down 6.7% from a year ago. The unemployment-to-vacancy ratio edged down to 3.0 from 3.1, which is technically an improvement, but it’s being driven more by falling unemployment than by hiring demand. Health care vacancies cratered 15.4% year-over-year, and accommodation and food services dropped 12.3%.
