The Canadian labour market delivered one of its worst non-pandemic months on record, losing 83.9k jobs in February. A harsh winter may have amplified the weakness, but Canada has seen winters before.
The numbers.
Full-time employment accounted for the bulk of the losses, with declines widespread across sectors.
- Employment: -83.9k (expected +10k)
- Previous month: -24.8k
- Full-time: -108.4k
- Part-time: +24.5k
- Private sector: -73k
- Unemployment rate: 6.7% (expected 6.6%) vs 6.5% prior.
The implications.
Today’s report reinforces the narrative of a softening Canadian economy.
- After upside surprises late last year, the labour market is clearly losing momentum, with job growth essentially zero over the past year.
- For now, bond markets appear reluctant to chase yields materially lower. The price of oil appears to be overshadowing the weakness in the Canadian economy. Yields are 5-9 bps lower this morning, but cuts are off the radar, with bond traders still expecting the BoC to hike later this year.
- The BoC meets next week. Today’s data won’t illicit any moves, but it will be interesting to note their comments on balancing weakening demand and supply-driven inflation.
