Employment Grows in Canada, But Part-Time Jobs Dominate

Jobs in Canada grew at a decent pace in January, while the unemployment rate fell 2 points, while expectations were for an increase. This sent the Canadian dollar higher while USD/CAD dipped to 1.34 lows, however it has bounced back up now as crude Oil reverses lower.

The Canadian jobs data revealed stronger-than-expected employment growth, but they were all concentrated in the part-time sector. Full-time employment fell during the month, extending a pattern from the previous month. Following the release of the study, the USDCAD originally fell, but has subsequently regained around half of its losses.

The Canadian January 2024 job report shows a robust increase in employment, surpassing expectations. below are the key highlights:

Canadian January 2024 Employment Report

• January employment increased by 37.3K, well above the forecasted 15.0K.
• The unemployment rate decreased to 5.7%, lower than the expected 5.9%.
• Full-time employment saw a decline of 11.6K, compared to the previous month’s decrease of 23.5K.
• Part-time employment increased significantly by 48.9K, contrasting with the previous month’s rise of 23.6K.
• The average hourly wage for permanent employees decreased to 5.3% from the previous month’s 5.7%.
• The participation rate remained relatively stable at 65.3%, slightly lower than the previous month’s 65.4%.

The January 2024 Canadian job report highlights the following key points:

• Employment gains were widespread across various industries in the services-producing sector.
• The wholesale and retail trade sector saw the largest increase, adding 31,000 jobs, representing a growth rate of 1.1%.
• The finance, insurance, real estate, rental, and leasing sector also experienced significant gains, adding 28,000 new jobs, reflecting a 2.1% increase.
• However, certain industries faced declines, notably in accommodation and food services, which lost 30,000 jobs, marking a decrease of 2.7%.
• The unemployment rate decreased by 0.1 percentage points to 5.7% in January 2024. This decline marks the first decrease in the unemployment rate since December 2022. Throughout most of 2023, the unemployment rate had been on an upward trend, rising from 5.1% in April to 5.8% in December.

In January 2024, the employment changes in various sectors were as follows:

• Wholesale and Retail Trade:
  • Employment in this sector rose by 31,000 (+1.1%).
  • This marked the first increase since June 2023 after a downward trend from August to December 2023.
  • Year-over-year, employment in this sector remained largely unchanged in January 2024.
•  Accommodation and Food Services:
  • • Employment in this sector decreased by 30,000 (-2.7%) in January.
    • This decline ended seven months of stability in employment.
    • Year-over-year employment in this sector remained relatively unchanged.
• Finance, Insurance, Real Estate, Rental, and Leasing:
  • Employment in this sector increased by 28,000 (+2.1%) in January.
  • This sector experienced a recovery from a cumulative decline of 56,000 (-4.0%) from July to November 2023.
• Other Sectors:
  • Employment increased in other sectors such as educational services (+28,000; +1.8%), transportation and warehousing (+20,000; +1.9%), business, building, and other support services (+16,000; +2.4%), and public administration (+16,000; +1.3%) in January 2024.
  • However, there were employment declines in professional, scientific, and technical services (-17,000; -0.9%) and information, culture, and recreation (-13,000; -1.5%).

Overall, while there were notable gains in certain sectors like wholesale and retail trade, finance, and education, other sectors experienced declines, leading to mixed employment changes across different industries.

From a technical standpoint, USD/CAD went below the 100 MSA which stood at around 1.34540 but the decline stalled right at the 200 SMA (purple) on the H4 chart. The price bounced off the 200-bar moving average on the 4-hour chart but has stalled at the 20 SMA (gray) now. These moving averages will likely provide support or resistance as the trade progresses until markets close in a few hours for the weekend.

USD/CAD Live Chart