Young business people in board room meeting at the office

The country saw a rush of 66,800 net new jobs in January in a gain fuelled by a hiring surge in the private sector, Statistics Canada said Friday.

The agency’s latest labour force survey said more people also searched for work last month, which pushed the unemployment rate to 5.8%, up from its 43-year low of 5.6% in December.

Economists had expected the addition of 8,000 jobs for the month and an unemployment rate of 5.7%, according to Thomson Reuters Eikon.

The biggest boost came from the number of private-sector employee positions, which climbed by 111,500 in January for the category’s biggest month-to-month increase since the agency started collecting the data point in 1976. The number of self-employed positions, which can include unpaid work, declined by 60,700.

The services sector saw a gain of 99,200 positions, led by new work in wholesale and retail trade, while the goods-producing industries experienced a net loss of 32,300 jobs, the report said.

Year-over-year average hourly wage growth in January for permanent employees was 1.8%, which was up from December’s reading of 1.5%, but still well below its May peak of 3.9%.

The Bank of Canada has been monitoring wage growth ahead of its interest-rate decisions as it tries to determine how well indebted households can absorb higher borrowing costs.

Last week, Bank of Canada senior deputy governor Carolyn Wilkins said the country has been in a “puzzling” stretch of weak wage growth at a time when the job market has been experiencing one of its biggest labour shortages in years.

She said the struggles of energy-producing provinces, which began with the late-2014 oil slump, have been a big factor that has dragged down national wage-growth numbers. The Bank of Canada has expressed confidence that wage growth will pick up its pace.

In emailed commentary, CIBC senior economist Royce Mendes said that, with weaker economic growth expected for the first quarter because of the oil sector, “the Bank of Canada is still likely on the sidelines for the first half of 2019.”

He added that today’s jobs data will be bullish for the loonie and bearish for fixed income.

The numbers Friday also showed that, year-over-year, the number of employee hours worked was up 1.2% compared to 0.9% in December.

Canada added 30,900 full-time jobs last month and 36,000 part-time positions, the report said.

More young Canadians, between the ages of 15 and 24 years old, also found work last month as youth employment gained 52,800 positions. The youth jobless rate edged up to 11.2%, from 11.1% in December, as more young people looked for work.

By region, Ontario and Quebec had the biggest employment increases last month. Energy-rich Alberta, hit hard by the oil-price decline, shed jobs for a second-straight month and saw its jobless rate rise to 6.8%, up from 6.4%.

Housing starts

Also released today were housing starts for January, the pace of which slowed compared with December.

Canada Mortgage and Housing Corp. says the seasonally adjusted annual rate came in at 207,968 units for the first month of the year compared with 213,630 in December.

Still, January was the fourth consecutive month that starts hit above 200,000, said Mendes in separately emailed commentary.

Economists had expected an annualized pace of 205,000 for January, according to Thomson Reuters Eikon.

The annual pace of urban starts slowed 2.1% in January to 190,912 units as single-detached urban starts fell 10.4% to 44,559 units. The annual pace of multiple-unit projects such as condominiums, apartments and townhouses increased 0.7% to 146,353 units.

Multi-unit building tends to be volatile, said Mendes, so the recent strength could be transitory, though recent building permit data suggest strength could continue for the next few months.

Looking ahead, Mendes said he expects a slower pace to building activity relative to last year, given the dampening effects of stricter mortgage rules and higher interest rates.