OTTAWA — The unemployment rate in Canada nudged up a tenth of a percentage point to 5.6 per cent as the economy added 30,300 net new jobs in February, Statistics Canada said Friday, beating expectations for growth amid concerns about the novel coronavirus outbreak.
The agency said the gain was led by Quebec, which posted its third consecutive month of job gains and saw its unemployment rate fall to 4.5 per cent, the lowest level for the province over the past four decades of comparable data.
Overall, the national unemployment rate also hovered near a 40-year low, even as it nudged up slightly as more people looked for work. The agency’s latest labour force survey said most of the gains nationally were in full-time work, where there was an increase of 37,600 positions, while part-time employment declined by 7,300 compared with January.
Economists on average had expected the agency would report an overall increase of 10,000 jobs for February and an unemployment rate of 5.6 per cent, according to financial markets data firm Refinitiv.
“The underlying message is that the economy was doing relatively well before it ran into the storm of the virus,” BMO chief economist Douglas Porter said.
“This is actually three months in a row where we’ve seen pretty sturdy job growth in Canada,” he said in an interview.
“It was a relatively healthy check-up for the Canadian economy, at least as of mid-February.”
Statistics Canada collects the survey data about jobs and wages in the middle of the month, meaning “there is little to be gleaned about how employers are reacting to the COVID-19 outbreak,” Brian DePratto, senior economist at TD Bank, wrote in a note.
“If it weren’t for COVID-19, this release would have us in an upbeat mood,” he wrote.
“Even the uptick in the unemployment rate was for the ‘right’ reason of more Canadians looking for work or otherwise engaging with labour markets.”
The job report followed the Bank of Canada’s decision earlier this week to cut it key interest rate by half of a percentage point to 1.25 per cent due to concerns about the immediate impact of the novel coronavirus.
Governor Stephen Poloz has said the central bank wanted to cut rates “in a decisive manner” to have a cushion for Canada’s economy against the effects of COVID-19, similar to when oil prices collapsed about five years ago.
He said the immediate effects the virus will have on business investment and consumer spending meant the downside risks to the economy today outweighed continuing concerns that cutting rates would fan financial vulnerabilities in Canada, such as high household debt.
Statistics Canada said Friday that young workers saw an increase of 20,000 jobs month-over-month, mostly for those aged 20 to 24, but the cohort’s unemployment rate didn’t change from 10.3 per cent.
While there were gains for young workers, employment for the core of Canadian workers who are aged 25 to 54 as well as those over 55 held steady for a third consecutive month in February.
The agency said there were gains in manufacturing, by 16,000 jobs, and a bump of 23,000 jobs in the retail sector. Those gains were offset by 15,000 fewer people working in professional, scientific and technical services in February, concentrated in Ontario, and 13,000 fewer jobs in the accommodation and food services sector.
Compared with a year earlier, the overall numbers show Canada added 245,000 jobs, an increase of 1.3 per cent, which was largely driven by gains in full-time work. Average hourly wages increased to $28.66 from $27.54 for all workers 15 years and older compared with the same month in 2019, for an increase of about 4.1 per cent.
That Canada’s job market held up in February is not much of a surprise given consumer and business confidence remained similarly resilient despite rail blockades and the coronavirus, RBC senior economist Nathan Janzen wrote in a note.
“Canadian labour market numbers remained broadly solid in February, but that will likely matter little for markets or policy-makers given increasingly intense concerns about the spread of the new coronavirus outside of China’s borders,” the note said.