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CANADA ECONOMICS: Action Economics on Today's Jobs Data

· 02/05/2021 04:14

09:07 AM EST, 02/05/2021 (MT Newswires) -- Action Economics noted employment plunged -212.8k in January, leaving a much deeper decline than expected following the -52.7k drop in December. The entire decline was due to a -225.4k drop in part time jobs that was driven by restriction in Ontario and Quebec that closed non-essential retail business beginning in late December. Also, Quebec implemented a curfew on January 14 that impacted the hours of some business, Statistics Canada reports. Additionally, the January reference week saw the continuation of measures in Alberta and Manitoba.

Among other details, full time jobs rose 12.6k after a 42.7k gain. The unemployment rate jumped to 9.4% from 8.8%. The jobless rate peaked at 13.7% last May. The pace of hourly wage growth accelerated to 5.9% y/y from 5.4% y/y, likely as lower wage service jobs fell out of the calculation. AE said the back to back job declines in December and January due to increasing restrictions back expectations that the BoC will maintain its accommodative settings for an extended period of time while increasing the pressure on the government to deliver more stimulus. However, its view remains that the second half of this year will bring a recovery, driven by the vaccine and a return to normal activities.