Canada Job Market Report (Jan 2024).

In continuing good news for newcomers and international students, Canada’s job market report for January 2024 showed the economy added 37,300, and the unemployment rate dropped slightly to 5.7 percent, according to Statistics Canada,

Some economists had predicted that only 15,000 jobs would be added in January, and that the unemployment rates would rise to 5.9 per cent.

January’s hirings were mainly in the part-time and public sector. The unemployment rate dropped for the first time in more than a year.

Expected drop in interest rate

In January, part-time employment increased by 48,900, while full-time employment fell by 11,600. Bloomberg reports that economists had predicted a gain in jobs of 15,000 and a rise in the unemployment rate from 5.9 to 6.9 percent.

 The unemployment rate, according to Statistics Canada,  had been rising during 2023, going from 5.1 percent in April to 5.8 percent in December.

Uncertain is the impact of this on interest rates for this year. 

Royce Mendes, managing director and head macro strategy at Desjardins, stated that “the (January) employment data suggests that June is now more likely for the first Bank of Canada rate cut of this cycle than April,”

2024 may still be a bumpy ride for the economy

He also predicts the Canadian economy may still be in for a “bumpy ride”In 2023, there will be layoffs as well as the continued effects of high interest rates. 

Scotibank economist Derek Holt said Canada’s job market remains resilient and points toward a decent economic rebound.

“Slowing, eh? Moose droppings on that!”Holt, wrote “Canada just added another 37,000k jobs last month after the prior month was revised up to a small gain of 7,000.”

In January, there were gains in jobs across several industries. The wholesale and retail sector saw a 31,000-job increase.

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Job Market Report shows job losses in specific sectors

The sectors of finance, insurance and real estate, as well as rental and leasing, saw a 28,000 job increase. These job gains helped offset the loss of jobs in other sectors such as accommodations and food services which lost 30,000 jobs. 

So, what can newcomers and international students expect from Canada’s economy in the months ahead?

Scotiabank’s Rebekah Young, speaking at Prepare for Canada’s Canadian Connections Summit for Newcomers, said, “Our best guess is that 2024 for Canada in economic terms is kind of a boring one moving sideways.’

“We’re not expecting to see a big recession,”Say Young “We’re not expecting to see massive job layoffs, but we are expecting things to cool as interest rates sit at their very (current) high level today. Now, we do expect towards the end of the year that your inflation will be that much closer towards two percent.”

Andrew Grantham, CIBC economist, predicts fewer rate reductions by the end 2024.

Grantham said that the data on jobless was a concern “suggest that the Bank won’t be in a rush to cut interest rates, and we maintain our expectation for a first move in June.”

The rise in hourly wages continues

“Given indications from (the January jobless) data and previously released GDP figures that the Canadian economy is in somewhat better shape than previously expected, we now forecast 25 basis point fewer cuts by the end of the year (finishing at 3.75 per cent rather than 3.50 per cent).”

The average hourly wage continued to increase, but at a slower rate. They increased 5.3 per cent year-over year, compared with a 5.4 per cent increase in December.

“A decent job gain, a slide in the jobless rate, and persistent 5 percent wage growth are hardly the stuff of an urgent call for rate cuts,” 

BMO Chief economist Douglas Porter noted that  “the Bank of Canada is likely to view this report as further reason for a patient policy stance”Regarding interest rate cuts. 

Steve Tustin is a contributing editor for Prepare for Canada and the editor of Rentals for Newcomers. He was the former managing director of Storeys.com and a former senior editor at both the Globe and Mail and the Toronto Star.

*Prepare for Canada used no AI-generated content in the writing of this story, and all sources are cited and credited where possible.

© Prepare for Canada 2023