The latest employment numbers from Statistics Canada are seen as a bright spot in the current, dim economic outlook. Job growth seems to have stepped out from under the clouds of threatened U.S. trade tariffs for the second month in a row in January.
Canada’s economy kicked off the New Year by adding 76,000 new jobs, dropping the unemployment rate one notch to 6.6%. That soundly beat analysts’ expectations for 25,000 new hires and an increase in unemployment to 6.8%.
December saw the addition of 91,000 jobs. The gains in both months outpaced increases in population growth.
With inflation now deemed to be under control, employment and economic growth have become key factors in the Bank of Canada’s calculations for setting interest rates. The January job numbers are seen as a sign the Bank’s rate cutting policies are working.
Some market watchers say the numbers also show there is still slack in the job market and therefore room for more rate cuts to further stimulate the economy and encourage continued job growth.
Of course, the tariff and trade war situation is clouding forecasts. Businesses are reporting soft hiring intentions which, again, could encourage the BoC to trim interest rates.
U.S. tariffs that were to take effect at the start of February have been delayed until March.