Payrolls ticked up in January, and the number of unfilled jobs was largely unchanged, according to data from Statistics Canada.
On Thursday, the national statistical agency reported that payroll employment rose by 45,600 in January, more than offsetting the decline of 10,600 in December. On a year-over-year basis, payrolls were up by 33,500 in the month.
Payrolls expanded in nine out of 20 sectors in January, led by an increase of 20,000 in the education segment, Statistics Canada noted — with smaller gains in the construction, finance and health-care sectors. At the same time, payrolls dropped in retail trade, it said, down by 6,600 in the month.
Alongside the increase in payrolls, job vacancies remained relatively unchanged in January, the agency said, with 492,400 unfilled jobs reported.
Similarly, the job vacancy rate — unfilled jobs as a proportion of total labour demand — was also unchanged in January at 2.8%.
Statistics Canada also reported that average weekly earnings were up by 2% in January, accelerating slightly from the 1.9% gain recorded in the previous month.
In a research note, National Bank Financial Inc. (NBF) noted that the strong payroll results stand in stark contrast to the latest Labour Force Survey, which reported hefty job losses for January and February.
That’s not new, however, the report said, as these data sets often conflict on a monthly basis — but, when the data is smoothed over six months, they reveal a common picture.
“That is, hiring slowed to a standstill by mid-2025 (briefly turning negative) and subsequently picked up by the end of the year,” it said.
“Overall, most labour market indicators lead us to a similar conclusion. At least through January, the job market was still weak but was no longer deteriorating and perhaps starting to recover. However, it’s not obvious that this nascent recovery will continue,” NBF said, particularly given the negative economic shock of the ongoing conflict in the Middle East.
The upcoming Canada-United States-Mexico trade agreement review “may also weigh on hiring in coming months as uncertainty weighs,” it added.
As for the impact on monetary policy, the report said “slack in the labour market is one major reason why the [Bank of Canada] is comfortable looking through the initial inflation impacts from this ongoing commodity price shock.”
Indeed, NBF said it doesn’t expect labour market conditions to “contribute to the market’s tightening bias anytime soon.”