Canadian job market shrunk by 0.5% in January

In Canada employment fell by 200,000 (-1.0%) in January and the unemployment rate rose 0.5 percentage points to 6.5%.

The number of people who were employed but worked less than half their usual hours rose by 620,000 (+66.1%) in January, the largest increase since March 2020. Total hours worked fell 2.2% after being at pre-virus levels in November and December 2021. All of the employment decline in January 2022 was among private sector employees (-206,000; -1.6%).

In January, 1 in 10 (10.0%) employees were absent from their job due to illness or disability.

Average hourly wages grew 2.4% (+$0.72) on a year-over-year basis in January, down from 2.7% in November and December 2021.

Employment in services-producing industries fell by 223,000. Accommodation and food services (-113,000), information, culture and recreation (-48,000) and retail trade (-26,000) saw the largest declines.

Employment increased by 23,000 in the goods-producing sector.

In the US Total non-farm payroll employment rose by 467,000 in January, and the unemployment rate was little changed at 4.0 percent, the U.S. Bureau of Labor Statistics reported today. Employment growth continued in leisure and hospitality, in professional and business services, in retail trade, and in transportation and warehousing.

Among the unemployed, the number of job leavers increased to 952,000 in January, following a decrease in the prior month. The number of persons on temporary layoff, at 959,000 in January, also increased over the month but is down by 1.8 million over the year. The number of permanent job losers, at 1.6 million, changed little in January but is down by 1.9 million from a year earlier.

After accounting for the annual adjustments to the population controls, the labor force participation rate held at 62.2 percent in January, and the employment-population ratio was little changed at 59.7 percent. Both measures are up over the year but remain below their February 2020 levels (63.4 percent and 61.2 percent, respectively).

The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. At its meeting ending on 2 February 2022, the MPC voted by a majority of 5-4 to increase Bank Rate by 0.25 percentage points, to 0.5%. Those members in the minority preferred to increase Bank Rate by 0.5 percentage points, to 0.75%. The Committee voted unanimously for the Bank of England to begin to reduce the stock of UK government bond purchases, financed by the issuance of central bank reserves, by ceasing to reinvest maturing assets. The Committee also voted unanimously for the Bank of England to begin to reduce the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, by ceasing to reinvest maturing assets and by a program of corporate bond sales to be completed no earlier than towards the end of 2023 that should unwind fully the stock of corporate bond purchases.

The European Central Bank (ECB) stated the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50% respectively.

In support of its symmetric 2% inflation target and in line with its monetary policy strategy, the Governing Council expects the key ECB interest rates to remain at their present or lower levels until it sees inflation reaching 2% well ahead of the end of its projection horizon and durably for the rest of the projection horizon, and it judges that realized progress in underlying inflation is sufficiently advanced to be consistent with inflation stabilizing at 2% over the medium term. This may also imply a transitory period in which inflation is moderately above target.