• 30.3k more Canadians were working in February. The unemployment rate ticked up a tenth, to 5.6% as more of us were engaged with labour markets.
  • The net gain was entirely due to full-time work, which was up 37.6k net positions in February. Private employment was in the driver’s seat, up 33.5k as both public sector employment and self-employment fell slightly.
  • Net hiring in trade (+22.6k) was the largest contributor to the monthly change, with manufacturing (+16k) and information, culture, and recreation (+14.4k) also turning in decent performances. It was a mixed bag across the other major sectors.
  • It bears noting, given the industry mix, that the survey was completed between February 9th and 15th, so any potential COVID-19 impacts are likely understated.
  • Quebec (+20k) delivered a third straight monthly gain, while Alberta (+11.4k) broke a three month contractionary streak. For the former, February brought a new record low unemployment rate of 4.5%, beating the record set last summer. The Albertan unemployment rate ticked down just a notch, to 7.2%. Conversely, Ontario saw its unemployment rate rise 0.3 percentage points to 5.5%, owing to a combination of a small drop in employment and a climb in the labour force.
  • Hourly wages for permanent employees held up nicely at 4.3% y/y, again flattered by fairly modest year-ago gains – a factor likely to play out for a few more months. Hours worked broke out of their doldrums, up 1.2% month-on-month after contracting for the prior three months.
  • The six-month trend for hiring stood at about 13k in February, more or less where you’d expect it to be at this point in the cycle (COVID-19 aside). Compared with a year ago, there were roughly a quarter million more Canadians working on net, with the gain entirely in full-time work.

Key Implications

  • If it weren’t for COVID-19, this release would have us in an upbeat mood. The job creation trend held, the mix was pretty decent, and those pesky hours finally turned in a decent performance. Even the uptick in the unemployment rate was for the ‘right’ reason of more Canadians looking for work or otherwise engaging with labour markets.
  • Unfortunately, given the timing of the survey, there is little to be gleaned about how employers are reacting to the COVID-19 outbreak. That said, today’s data suggests that, as Bank of Canada Governor Poloz noted in his speech yesterday, Canadian labour markets remained a key source of economic resilience ahead of the viral outbreak.
  • At this point, the rear-view mirror of this and other early-2020 data is even less helpful than normal in assessing the Bank of Canada’s path forward. As Wednesday’s interest rate decision and follow-up speech showed, the Bank of Canada is more concerned about what’s to come as COVID-19 effects ripple through the economy. The first volley in the battle against confidence and other negative impacts has been fired, and it seems safe to assume there is more to come.

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