The economy created +66.8k jobs in January, far greater than expectations, despite headwinds of delayed investment from NAFTA negotiations, the drag of the B20 mortgage rules, and plummeting prices for Canadian oil. On a y/y basis, jobs grew at a stiff +1.8%, the fastest in over a year. Of the ten provinces, only Saskatchewan and the oil-producing province of Alberta had job losses, but on a y/y basis, jobs increased in every province. The labor force surged by +103.7k, the second highest of the entire recovery, driving the participation rate up +0.2pp to 65.6%, and raising the unemployment rate to 5.8%, just above last month’s record low 5.6%. Wage growth for all workers remained steady at +2% y/y in January, right at the Bank of Canada’s inflation target, although wages for full time workers rose from +1.5% y/y to +1.8% y/y. Despite some recent softness in the overall economy, the strong labor market suggests that the Bank of Canada may raise rates at least once this year.
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Weekly Export Risk Outlook 13 February 2019