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If Canadian job numbers are so volatile, why are we glued to today’s report?

These are stories Report on Business is following Friday, Feb. 7, 2014.

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Those pesky job numbers
Canada's jobs report today far surpassed the expectations of economists, which could again raise questions about the volatility of the numbers.

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As The Globe and Mail's Tavia Grant reports, Statistics Canada said today that the economy churned out 29,400 new positions in January as the unemployment rate dipped to 7 per cent from 7.2 per cent in December.

That's a marked turnaround from the loss of 44,000 jobs in December and comes just ahead of Finance Minister Jim Flaherty's budget next week. And it tops the projections of economists for gains of 15,000 jobs and an unemployment rate of 7.1 per cent.

As The Globe and Mail's Bill Curry reported earlier this week, a Department of Finance analysis suggests that the monthly numbers in Canada have been volatile of late, so much so that they're "well above" the historical norm.

There's no reason given in the briefing note obtained by The Globe and Mail, and Statistics Canada says there's no rise in volatility.

Here's what Bank of Montreal senior economist Robert Kavcic said before this morning's data as he projected employment growth of 20,000 and a decline in the jobless rate to 7.1 per cent:

"Complicating matters is the fact that the weather, which looks like it played a role in December (see the 30,000 drop in Ontario, which endured an ice storm) didn't exactly become balmy in January. By sector, keep an eye on construction, which posted declines in each of the last four months of 2013, and manufacturing, which notched a solid two-month finish to the year. Unless we get a rare trend-like print, expect more cries about the big swings and volatility in the Labour Force Survey. But this, dear readers, is hardly a new phenomenon."

As for the actual report, there were mixed results besides just the headline number, which, again, could raise questions.

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"The January Canadian jobs report was good on the headline but weak in the details," said senior economist Krishen Rangasamy of National Bank Financial.

"The job gains were driven by self-employment and the number of paid jobs grew a meagre 1,000 as gains in government offset further declines in the private sector," he added, referring to a loss of 14,000 jobs among corporations.

"After the weather wreaked havoc in the prior month, causing a massive 44,000 drop, employment bounced back in affected sectors such as agriculture, construction, and accommodation services."

He cited the "more reliable" six-month moving average, which shows employment up 15,000 a month since August, with 12,000 of them in the private sector.

That, he added, is "not a bad performance, and consistent with the pick-up in economic growth in the second half of 2013."

U.S. report disappoints
American employers created 113,000 jobs in January, a disappointing result that could unsettle financial markets, our Washington correspondent Kevin Carmichael reports.

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The Federal Reserve last month opted to push ahead with its careful reversal of monetary stimulus, expressing confidence that the labour market was healing. The Labor Department's latest report card on the state of hiring calls into question the Fed's confidence.

Most on Wall Street were expecting an increase in non-farm payrolls of around 180,000. The U.S. labour market has now underperformed for two consecutive months, as employers added only 75,000 positions in December after creating more than 200,000 jobs in three of the previous four months.

The unemployment rate, determined by a separate survey of households, dropped to 6.6. per cent from 6.7 per cent in December.

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