Economists expect the next Labour Force Survey issued by Statistics Canada this Friday will show that the country’s job growth cooled in January following strong gains at the end of 2017.
CIBC economist Nick Exarhos, writing in a recent commentary to clients, said the January labour report due out on Friday is expected to show a gain of about 13,000 new jobs, which he said will be enough to keep Canada’s national employment rate at a historically low 5.8%.
"Indeed, January's more modest increase will in part be a sign of things to come in 2018, with a slower path to job gains coming as we edge ever closer to full employment," he wrote.
The latest jobs report for January of this year follows a very good fourth quarter for employment gains in Canada, with National Bank pointing out that "no less than 173,700 jobs were added in the country in the three months to December, the second largest tally since 2002."
"What's more, the current streak of consecutive monthly gains for employment now stands at 17, the longest since 2000," added National Bank.
Scotiabank is forecasting that Canada’s unemployment rate for January will come in at 5.7% with the addition of about 10,000 jobs. At BMO Capital Markets, economist Benjamin Reitzes said job growth likely decelerated in January to 20,000 gains given underlying economic growth of around two per cent.
However, economists with TD Canada Trust are forecasting January employment to fall by about 12,000 jobs due to Ontario's recently introduced minimum wage increase as a partial source for an expected slowdown in job creation.
"The minimum wage hike in Ontario, which was implemented on January 1, should lead to job losses totalling 90,000 over the mid-term," TD economist said in a written commentary. "As a result, we expect Ontario to underperform in January and drive the net loss of jobs."
The Bank of Canada on January 17 bumped the target for the overnight lending rate to 1.25 per cent from one per cent — the third time it has moved its benchmark rate from once-record lows last summer. The central bank noted last month that wages had picked up but were rising by less than would be typical in a tight job market. The Bank of Canada's next interest rate decision date is March 7.