The economy suffered a setback under the impact of the Omicron variant, StatCan reveals
The Canadian economy shed 200,000 jobs in January amidst widespread public health restrictions and business closures thanks to the Omicron variant of COVID-19, the country’s national statistics agency has said.
In its Labour Force Survey for January, Statistics Canada said that employment across the country fell by 1% last month, with the unemployment rate rising by half a percentage point to 6.5%.
The number of Canadians who worked less than half their usual hours despite still being employed rose by a full 66.1% (620,000) in January, with StatCan saying that represented the largest increase among that cohort since March 2020 – the beginning of the pandemic.
Ontario and Quebec were the two biggest contributors to those employment declines, the body said, with food services and accommodation the hardest-hit industry. Newfoundland and Labrador, New Brunswick and Prince Edward Island were the other provinces to post negative employment figures.
Jarring economic numbers for the opening month of the year had been widely anticipated, with many provincial restrictions having come into force as early as the opening week of the year.
Speaking with Canadian Mortgage Professional this week, BMO Financial Group chief economist and managing director Doug Porter said that “very ugly” economic data for January was on the way – with that being a key reason for the Bank of Canada’s decision not to increase its benchmark policy rate last month.
Read more: BMO's Porter: "ugly" January economic data on the way
“The economy is still dealing with some pretty severe restrictions from Omicron, and really, those only began at the start of the year,” he said.
“I think [the Bank of Canada] just want to make sure the restrictions are starting to lighten up and things are getting back to somewhat normal before they start raising interest rates.”
The January increase in the unemployment rate was the first for nine months, with the last spike arriving in April 2021. The total number of unemployed people in Canada now sits at 1.34 million.
The report also noted that almost 25% of Canadians now usually work exclusively from home, a significant increase from the 7.5% figure recorded in the 2016 Census of Population.
“For one-quarter of Canadians, working from home has become a long-term way of working,” StatCan indicated.
