Canada adds 48,300 new jobs, but wage growth and hours worked slip

OTTAWA – The country’s labour market continues to pump out new jobs, but Canadians are seeing wage increases fade and their work hours shrink.

Last month, the job market unexpectedly added 48,300 net new positions, thanks to surges in part-time and private-sector work, Statistics Canada said Friday.

The January employment survey showed an increase of 32,400 part-time positions and a smaller gain of 15,800 jobs in the more-desirable category of full-time work. Both numbers, however, were too low to be deemed statistically significant.

The report also found that private-sector jobs rose 32,400 between December and January, compared with an increase of 7,700 public-sector positions.

The increases helped drop the unemployment rate last month to 6.8 per cent from 6.9 per cent.

Economists described the overall job growth, which once again defied their expectations, as “very impressive” and “remarkably strong.”

“It seems as if we are all thinking that streak is going to come to an end and it just keeps on going,” said Desjardins senior economist Jimmy Jean, noting the number beat the consensus prediction for a sixth straight month.

But even with more people working, Jean said the composition of the labour data remained sub par due to some “lingering weakness.”

He pointed to the disappointing growth in hourly wages in January compared with a year earlier. Hourly earnings increased by less than 1.3 per cent, which was below inflation.

In the past, Jean said hourly wages have often grown between two and three per cent, and sometimes even a little bit more.

“So, there’s been a steady deterioration on that front and it seems like we can’t really get off that trajectory,” said Jean, who also noted that year over year hours worked was only up 0.2 per cent due to the shift toward part-time work.

Jean noted that the Bank of Canada had expressed concerns about hours worked and earnings growth and didn’t think the latest jobs data would ease its preoccupations, even if overall the job market continues to expand.

Other experts also pointed to the slumping wage and work hours increases.

“It’s disappointing to see that we had a decline in hours worked — we also saw very weak wage growth,” said Craig Alexander, chief economist for the Conference Board of Canada.

Alexander was encouraged that the “surprising” amount of job creation that Canada saw in the second half of last year has continued into 2017.

He said some people will point to negative details of the job growth, such as the rise of part-time positions.

But Alexander noted it’s important to remember that the gain of nearly 16,000 full-time positionslast month was healthy on its own, even if most of the new jobs created were part time.

“I think the critics are often too glass-half-empty when they’re looking at this,” he said.

Looking back 12 months, Canada gained 276,100 net new jobs overall with the addition of 86,200 full-time positions and 189,900 part-time jobs.

The job market has now seen increases in five out of the last six monthly reports. In December, the overall labour force expanded by 53,700 net jobs compared with the previous month.

Economists had projected the job numbers to stay unchanged last month and for the unemployment rate to hold at 6.9 per cent, according to Thomson Reuters.

The vast majority of the new jobs — or 42,600 positions — were created in the services sector, with the bulk of those concentrated in areas such as finance, insurance, real estate, business management, transportation and warehousing.

The number of factory jobs in Canada increased by 5,600 positions last month.

The category of self-employed positions added 8,200 last month while paid employee jobs climbed by 40,000.

Among the provinces, Ontario gained the most jobs last month with 28,800 new positions, an increase of 0.4 per cent compared with December. Most of those new jobs — or 23,500 positions — were part time.

The overall number of jobs in Alberta last month was essentially unchanged compared to December, but the province did shed 24,300 full-time positions.

The report was stronger for British Columbia, which gained 11,200 net new positions last month thanks to a month-over-month increase of 25,400 full-time jobs.

Statistics Canada also found the national youth unemployment rate rose in January to 13.3 per cent, up from 12.6 per cent.

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Note to readers: This is a corrected story. An earlier version incorrectly stated the jobs growth figure in the second headline.