Canada's Job Market Surprises with Steady Growth Amid Challenges

Canada's unemployment rate fell to 6.6%, with the economy adding 76,000 jobs in January. Despite gains in employment, 1.5 million remain jobless, highlighting ongoing challenges. Manufacturing and services contributed significantly to job growth, while wage growth slowed, impacting inflation trends monitored by the Bank of Canada.

In a surprising turn, Canada's unemployment rate fell to 6.6% in January with job gains continuing to outpace forecasts. The country added a net 76,000 jobs during the month, maintaining a positive trend despite challenges in the labor market and economic pressures.

Analysts had expected a softer addition of 25,000 jobs and a higher unemployment rate of 6.8%. However, the decline in unemployment occurred even as the number of unemployed remained at a significant 1.5 million, indicating persistent difficulties for many seeking work.

Notably, job growth was notable in the manufacturing, professional, scientific, and technical sectors. Youth employment also saw improvements, yet wage growth has been slowing, raising concerns for inflationary trends closely monitored by the Bank of Canada. Meanwhile, external factors like potential U.S. tariffs pose risks to future economic activity.

(With inputs from agencies.)