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Victoria unemployment rate inched up last month, but still well below national rate

Greater Victoria’s unemployment rate rose marginally to 4.5 per cent last month from 4.2 per cent in December
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According to Statistics Canada, sectors in the capital region that experienced job growth year-over-year include educational services and the health-care and social-assistance sector.

Greater Victoria’s unemployment rate rose marginally to 4.5 per cent last month from 4.2 per cent in December — still well below the national rate, which dropped to 5.7 per cent, the first decline since late 2022.

According to Statistics Canada’s monthly labour force survey, released Friday, sectors in the capital region that experienced job growth year-over-year include educational services, which employed 20,300 people last month, up from 18,900 in January 2023.

The health-care and social-assistance sector also climbed to 36,290 workers from 35,300 the year before.

Jobs in finance, insurance and rental housing rose to 12,400 in January from 10,700 in January 2023.

The wholesale and retail-trade sector also saw growth, moving up to 33,600 jobs last month from 29,800.

Declines, meanwhile, were seen in manufacturing, which slid to 7,800 jobs from 8,600 the year before, and professional, scientific and technical services, which dropped to 17,900 jobs from 19,600 in January 2023.

Accommodation and food services also dropped to 14,500 workers from 15,500 a year ago.

B.C.’s unemployment rate decreased slightly from 5.5 per cent to 5.4 per cent, Brenda Bailey, minister of Jobs, Economic Development and Innovation, said Friday.

Bailey said B.C. is “holding steady” in the face of a slower global economy and high interest rates, gaining 70,900 jobs since the same time last year, “including some of the strongest private-sector and self-employment growth in the country.”

B.C.’s youth unemployment rate of 7.4 per cent is the lowest among the provinces, she said.

Bailey pointed to major job-generating construction projects coming up or underway, including plans to build Tesla’s largest North American service centre in Vancouver, and B.C. Hydro infrastructure projects

Nationally, the Bank of Canada will be in no rush to cut interest rates after Statistics Canada reported a larger-than-expected employment gain last month, economists say.

The labour force survey said the economy added 37,000 jobs in January after several months of relatively no change in employment.

“I would classify the labour market as tighter-than-expected, but not necessarily stronger-than-expected,” said Andrew Grantham, CIBC’s executive director of economics.

“That’s because, yes, employment continued to rise a little bit faster than the consensus expected. But it really paled in comparison with the big increase in population.”

Canada’s population of people aged 15 and older grew 0.4 per cent between December and January, far surpassing the 0.2 per cent growth in employment.

The labour market cooled significantly in 2023 as high interest rates weighed on consumer spending and business investment, pushing the unemployment rate up from 5.1 per cent in April to 5.8 per cent in December.

Brendon Bernard, a senior economist with hiring website Indeed says the unemployment rate, however, doesn’t give the full picture when it comes to the state of the labour market. That’s because it only measures the proportion of unemployed people among those who are actively looking for work.

Statistics Canada’s report emphasized the employment rate — which measures the proportion of the working-age population that’s employed — has been declining for four consecutive months, including in January.

“I think that’s probably a better barometer of the direction of the labour market,” Bernard said.

Even so, the relatively decent state of the labour market suggests to economists that the central bank can take its time when it comes to cutting interest rates.

“Today’s data is certainly not going to speed up the timeline for the Bank of Canada,” Grantham said.

The Canadian economy also appeared to end 2023 on a stronger note than expected.

Statistics Canada reported Wednesday the economy grew 0.2 per cent in November, marking the first expansion in six months.

A preliminary estimate suggests real gross domestic product increased 1.2 per cent on an annualized basis in the fourth quarter, following a decline of a similar magnitude in the third quarter.

Last month, the Bank of Canada opted to hold its key interest rate at five per cent and signalled that it’s inching closer to rate cut considerations.

However, governor Tiff Macklem expressed concern about the stickiness of inflation and warned the central bank will be ready to raise rates if price growth doesn’t co-operate.