Canada Change in Employment Falls for First Time Since July 2016

Talking Points:

- Net change in Canadian employment fell in January by -88k recording the first decline since July 2016

- The unemployment rate in January rose to 5.9% missing the forecasted 5.8%

 Part-time employment falls by -136k, full-time employment increased by +49k

- Jobs report pushed has USDCAD trading narrowly

After two months of strong job growth in Canada, Statistics Canada reported that employment fell by 88,000 in January taking a turn for the worse. This decline in employment was comprised of a part-time employment decline of -137,000 jobs and an increase of 49,000 full-time jobs. In addition, the unemployment rate rose by 10 basis points which now stands at 5.9% versus the 5.8% forecast. Year-over-year, employment grew by 289,000 (1.6%). Hours worked rose by 2.8% year-over-year. Participation fell slightly from 65.8% to 65.5%.

Ontario and Quebec Lead in Job Losses

Last month, employment fell for core-aged women (25 to 54 years old), people 55 and older, and youth aged 15 to 24. Core-aged men saw little change in employment. The largest decline in jobs came out of Ontario and Quebec. In Ontario, 51,000 jobs were lost followed by Quebec which saw a decline of 17,000 jobs.

Industrial Declines

Declines were spread across a number of industries, including educational services (-20,000); finance, insurance, real estate, rental and leasing (combined decline of -18,000); professional, scientific and technical services (combined decline of -17,000). Finally, the construction sector saw the smallest decline in employment of -15,000 jobs.

Here are a few prints that have had little impact on the Canadian Dollar this morning:

- CAD Participation Rate (OCT): 65.5%, from 65.8%

- CAD Unemployment Rate (JAN): 5.9% versus 5.8% expected, from 5.8% (revised higher from 5.7% previously)

- CAD Full Time Employment Change (JAN): 49k, from 23.2k (revised lower from 23.7k previously)

- CAD Part Time Employment Change (JAN): -137k, from 41.6k (revised lower from 54.9k previously)

See the DailyFX economic calendar for a look at the upcoming data next week

Chart 1: USDCAD 15-minute Chart (February 7 - 9, 2018)

As expected, the bearish jobs Canadian jobs report caused USDCAD to spike. However, the move did not last long as the Loonie rallied against the dollar to a low of 1.2558. The pair is currently trading narrowly with no clear direction.

--- Written by Dylan Jusino, DailyFX Research