Canada's labor market sees growth and challenges in January

In January 2024, the Canadian labor market exhibited subtle yet notable changes, according to the latest Survey of Employment, Payrolls, and Hours as reported by Statistics Canada. 

The number of employees receiving pay and benefits, referred to as “payroll employment,” increased by 39,800 (0.2 percent) in January. This rise contributes to an annual increase of 212,900 employees (1.2 percent) compared to the previous year.   

Job vacancies across all sectors remained relatively stable from December, with 632,100 positions open in January. However, this figure represents a decrease of 34,800 vacancies (5.2 percent) from November, indicating a slight cooling in the job market.   

The survey unveiled employment shifts across various sectors, highlighting the dynamic nature of Canada's labor market in January:   

Growth Leaders: 

• Retail Trade: Increased by 9,600 jobs or 0.5 percent, leading the sectors in growth. 

• Manufacturing: Saw a rise of 7,300 jobs or 0.5 percent. 

• Finance and Insurance: Grew by 6,900 jobs or 0.8 percent. 

• Information and Cultural Industries: Expanded by 6,000 jobs or 1.7 percent. 

• Transportation and Warehousing: Upped by 5,200 jobs or 0.6 percent. 

Sectors Facing Declines: 

• Construction: Experienced a decrease of 3,500 jobs or -0.3 percent. 

• Management of Companies and Enterprises: Dropped by 1,800 jobs or -1.5 percent.   

Retail trade, in particular, showed a notable rebound with a 0.5 percent increase in payroll employment in January, following four consecutive months of decline from September to December 2023.  

The manufacturing sector's overall growth was spearheaded by food manufacturing (+2,900 or 1.2 percent), highlighting sector-specific recovery.   

Finance and insurance also recorded significant growth, with an increase of 6,900 jobs (0.8 percent) in January, concentrated in "securities and commodity contracts intermediation and brokerage" (+5,400 or 10 percent).   

In transportation and warehousing, a sectoral increase of 5,200 jobs (0.6 percent) was noted in January, marking a recovery from previous declines.   

Conversely, construction witnessed a decline of 3,500 jobs (-0.3 percent) in January, continuing a downward trend from its peak in June 2023.   

Regarding earnings, average weekly earnings increased by 0.7 percent to $1,228 in January, with an annual growth of 3.9 percent. This increase in earnings reflects various factors, including wage changes, employment composition, and hours worked.   

The job vacancy rate in January remained at 3.6 percent, consistent with December but 1.2 percentage points lower than in January 2023.  

The sectors of transport and warehousing, manufacturing, and wholesale trade saw notable declines in job vacancies, while retail trade and other services experienced increases.   

Regionally, job vacancies rose in Quebec but fell in Alberta, Saskatchewan, and Nova Scotia, with variations across provinces reflecting the economic landscape of Canada.