MNI: Canada Feb Employment Stalls As Storms Cut Hours Worked
MNI (OTTAWA) - Canada's labor market stalled after three prior months of strong job gains in February as winter storms cut hours worked while wage growth remained elevated, a mixed picture that keeps the U.S. trade war as the main consideration around next week's central bank decision.
Employment rose by a slim 1,100 in February after January's 76,000 gain, Statistics Canada reported Friday, leaving the unemployment rate close to a post-pandemic high of 6.6%. Economists had predicted about 15,000 net new jobs, after a cumulative gain of 211,000 over the prior three months.
Average wage growth moved up to 3.8% in February from a year ago compared with January's 3.5% pace, taking it further above the central bank's 2% inflation target.
Slack in the job market driven by record immigration is slowing with the government moving to curb temporary student and low-wage work permits. The working-age population grew 47,000 in February versus 97,000 a year earlier, StatsCan said.
The figures appear dated with the U.S. moving to impose 25% tariffs on most Canadian products next month, though Donald Trump has now delayed full implementation of those penalties a few times now. Some economists are flipping predictions to say the BOC will cut rates another quarter-point on March 12 rather than hold them after setting the G7's fastest pace of rate cuts since June.
The Bank cut its key interest rate a sixth time in January with a return to a 25bp cut, and said tariffs represent a major risk to the outlook. Staff estimates indicated a potential recession in the first year of a trade war, slack that offset a good deal of the price boost from inflation.
Winter storms curbed the job market in February as hours worked fell 1.3% on the month, the biggest decline since April 2022. They remain 0.5% higher than a year ago.
Job gains were narrow with wholesale and retail up 1.7% and the finance category gaining 1.1%. Professional and scientific services employment was down 1.6% and transportation and warehousing by 2.1%. Full-time employment fell by 19,700 and part-time gained 20,800.