Analyzing Canada's Job Market: A Reflection on Economic Theory

This essay is a reflection on how economic theories are evidenced in a current affairs news article focusing on Canada's job market. The article discusses the addition of 66,800 net new jobs in January, driven by a surge in private-sector hiring, while the unemployment rate rose to 5.8%. The reflection explores the connection between these statistics and macroeconomic principles, such as wage growth, labor force participation, and sectoral shifts. It also addresses the Bank of Canada's monitoring of wage growth in relation to interest rate decisions and household debt. The analysis extends to regional variations, particularly the impact of oil price declines on Alberta's employment figures. This essay aims to connect these real-world observations with relevant economic theories.

Link: https://globalnews.ca/news/4938714/canada-jobs-january-2019/
February 8, 2019 10:09 am
Canada adds 67K new jobs in
January, but unemployment rate rises
to 5.8%
By Andy Blatchford The Canadian Press
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The Canadian economy added nearly 67,000 net new jobs in January, with strong
gains in the private sector.
Chris Young/THE CANADIAN PRESS
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The country saw a rush of 66,800 net new jobs in January in a gain fuelled
by a hiring surge in the private sector, Statistics Canada said Friday.
The agency’s latest labour force survey said more people also searched for
work last month, which pushed the unemployment rate to 5.8 per cent, up
from its 43-year low 5.6 per cent in December. Economists had expected the
addition of 8,000 jobs for the month and an unemployment rate of 5.7 per
cent, according to Thomson Reuters Eikon.
The biggest boost came from the number of private-sector employee
positions, which climbed by 111,500 in January for the category’s biggest

month-to-month increase since the agency started collecting the data point
in 1976. The number of self-employed positions, which can include unpaid
work, declined by 60,700.
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The services sector saw a gain of 99,200 positions, led by new work in
wholesale and retail trade, while the goods-producing industries experienced
a net loss of 32,300 jobs, the report said.
Year-over-year average hourly wage growth in January for permanent
employees was 1.8 per cent, which was up from December’s reading of 1.5
per cent, but still well below its May peak of 3.9 per cent.
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The Bank of Canada has been monitoring wage growth ahead of its interest-
rate decisions as it tries to determine how well indebted households can

absorb higher borrowing costs. Last week, Bank of Canada senior deputy
governor Carolyn Wilkins said the country has been in a “puzzling” stretch of
weak wage growth at a time when the job market has been experiencing one
of its biggest labour shortages in years.
She said the struggles of energy-producing provinces, which began with the
late-2014 oil slump, have been a big factor that has dragged down national
wage-growth numbers. The Bank of Canada has expressed confidence that
wage growth will pick up its pace.
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The numbers Friday also showed that, year-over-year, the number of
employee hours worked were up 1.2 per cent compared to 0.9 per cent in
December. Canada added 30,900 full-time jobs last month and 36,000 part-
time positions, the report said.
More young Canadians, between the ages of 15 and 24 years old, also
found work last month as youth employment gained 52,800 positions. The
youth jobless rate edged up to 11.2 per cent, from 11.1 per cent in
December as more young people looked for work.
By region, Ontario and Quebec had the biggest employment increases last
month. Energy-rich Alberta, hit hard by the oil-price decline, shed jobs for a
second-straight month and saw its jobless rate rise to 6.8 per cent, up from
6.4 per cent.
© 2019 The Canadian Press
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