OTTAWA — The unemployment rate in Canada nudged up a tenth of a percentage point to 5.6 percent as the economy added 30,300 net new jobs in February, Statistics Canada said Friday, beating expectations for growth amid concerns about the novel coronavirus outbreak.
“Even the uptick in the unemployment rate was for the ‘right’ reason of more Canadians looking for work or otherwise engaging with labour markets.”
The job report followed the Bank of Canada’s decision earlier this week to cut it key interest rate by half of a percentage point to 1.25 per cent due to concerns about the immediate impact of the novel coronavirus.
Governor Stephen Poloz has said the central bank wanted to cut rates “in a decisive manner” to have a cushion for Canada’s economy against the effects of COVID-19, similar to when oil prices collapsed about five years ago.
He said the immediate effects the virus will have on business investment and consumer spending meant the downside risks to the economy today outweighed continuing concerns that cutting rates would fan financial vulnerabilities in Canada, such as high household debt.
Statistics Canada said Friday that young workers saw an increase of 20,000 jobs month-over-month, mostly for those aged 20 to 24, but the cohort’s unemployment rate didn’t change from 10.3 per cent.
While there were gains for young workers, employment for the core of Canadian workers who are aged 25 to 54 as well as those over 55 held steady for a third consecutive month in February.
The agency said there were gains in manufacturing, by 16,000 jobs, and a bump of 23,000 jobs in the retail sector. Those gains were offset by 15,000 fewer people working in professional, scientific and technical services in February, concentrated in Ontario, and 13,000 fewer jobs in the accommodation and food services sector.
Compared with a year earlier, the overall numbers show Canada added 245,000 jobs, an increase of 1.3 per cent, which was largely driven by gains in full-time work. Average hourly wages increased to $28.66 from $27.54 for all workers 15 years and older compared with the same month in 2019, for an increase of about 4.1 per cent.
That Canada’s job market held up in February is not much of a surprise given consumer and business confidence remained similarly resilient despite rail blockades and the coronavirus, RBC senior economist Nathan Janzen wrote in a note.
“Canadian labour market numbers remained broadly solid in February, but that will likely matter little for markets or policy-makers given increasingly intense concerns about the spread of the new coronavirus outside of China’s borders,” the note said.
This report by the Canadian Press was first published on March 6, 2020.
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