˙ Feb 12, 2018

Economy loses 88,000 jobs in January

Economy loses 88,000 jobs in January

A mere month after employers added a robust 79,000 jobs to the economy in December, those gains were largely lost in January, a potential consequence of the hike in minimum wage levels officially going into effect in Ontario.

In 2018's opening month, employment in Canada dropped by roughly 88,000, with the most precipitous dip evident in part-time jobs, according to Statistics Canada. In the process, what was the country's lowest jobless rate since 1976 edged higher, back to 5.9 percent.

The slip was unexpected by economists, who predicted a slowdown from December's total, but not to the extent of what actually transpired. In a poll conducted by Bloomberg, economists expected a net gain of 10,000 jobs across the nation.

Did minimum wage hike play a role?
January was the same month Ontario - Canada's most-populated province - raised its minimum wage, up from $11.60 to $14 per hour. Some economists are of the mindset that business owners may have dialed back their pace of hiring to soften the impact of spending more on labor.

But Brittany Baumann, a macro strategist from TD Securities, told the Financial Post it is too early to come to any sweeping conclusions.

"This is still a solid job market," Baumann explained. "We will have to monitor how the market adjusts to the minimum wage."

She further stated the January jobs report wasn't as bad as the main takeaway from the data suggests, as full-time employment actually gained ground - by 49,000 - a total that the 137,000 part-time positions lost clouded over. She also referenced how climbing wages are also indicative of a resilient job market, both for those looking for work as well as those companies aiming to shore up their staff levels.

That said, the total amount of jobs lost in Ontario suggests the change in minimum wage may be to blame. Employment in the province plummeted by 51,000, most of them part-time, Statistics Canada reported. This compared to a dip of just 5,800 in New Brunswick.