Canada's Unexpected Economic Turn: Unemployment Falls as Jobs Surge

Canada's unemployment rate fell to 6.6% with 76,000 new jobs added in January. Despite improvements, 1.5 million remain jobless. The central bank noted signs of recovery, though tariffs and lower immigration may hinder growth. Job gains were balanced across sectors, with youth unemployment declining.

In a surprising economic development, Canada's unemployment rate dropped once more, coinciding with significant job growth, according to Friday's data. These figures mark a recovery milestone, moving away from an eight-year peak of joblessness, excluding the pandemic period, as recorded in November.

Economic indicators showed a 0.1% decline in the unemployment rate to 6.6% and the economy absorbed a net gain of 76,000 jobs in January. This outcome surpassed analysts' expectations, who predicted only 25,000 job additions and an unemployment rate of 6.8%. Despite these gains, 1.5 million Canadians remain unemployed.

The economic landscape remains fragile with potential U.S. tariffs and dwindling immigration threatening progress. While the Bank of Canada notes slight improvements, cautious hiring intentions persist among businesses. Canadian currency showed little movement amidst these developments, trading slightly higher against the U.S. dollar.

(With inputs from agencies.)