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Surprising jobs numbers show Canadian labour is ‘holding on’: economist – BNN Bloomberg

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Surprising jobs numbers show Canadian labour is ‘holding on’: economist – BNN Bloomberg

Canada’s surprising job numbers for February show a resilient economy that has remained consistent over the past few months.

On Friday, Statistics Canada reported the Canadian economy added 41,000 jobs in February, as the nation’s unemployment rate ticked up to 5.8 per cent.

Brendon Bernard, senior economist at Indeed, said the figures are “really similar” to January’s, as unemployment ticks higher due to high levels of immigration. 

“In general, big picture, it’s consistent with the labour market holding on as we are continuing this period of economic uncertainty, but not deteriorating like I think some might have feared,” he told BNN Bloomberg in a television interview on Friday.

“We did see the unemployment rate tick up … that’s still a pretty low number and so overall, consistent with maybe a slight softening of the market that we saw throughout the second half of last year, continuing to start this year.”

Meanwhile, the report found hourly wages climbed five per cent from a year ago, but year-over-year growth fell from the 5.3 per cent in January.

“A fall in wage growth signals more disinflation in sight: it dampens workers’ wage growth expectations and when employers do not have to keep raising wages, they can keep prices in check,” Tu Nguyen, an economist with RSM Canada, wrote in a statement.

Dominique Lapointe, director of macro strategy for Manulife Investment Management, called Canada’s unemployment rate “concerning” when factoring in immigration. 

“One good news from the (Bank of Canada’s) standpoint is that wage growth slowed down both in (year-over-year) and momentum basis,” he said. “In turn, this should be seen through easier core services inflationary pressure later this year.”

What does this mean for the Bank of Canada?

Bernard said the jobs data will do little to influence the Bank of Canada’s decision-making concerning interest rates.

“I think the key thing they’re watching for right now is coming out from the (Consumer Price Index) report seeing their various range of measures of inflation getting back to two per cent,” he said.

“This report, I don’t think, moves the dial really.”

Nguyen added that Friday’s numbers “did little to sway” to Bank of Canada’s thinking.

“The Bank might feel no urgency to cut rates faster as the economy added tens of thousands of full-time positions, a sign of remaining steam that could keep the economy afloat for a few more months,” Nguyen said.

With files from The Canadian Press

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