February 8, 2019 / 3:25 PM / in 3 months

Instant View: Canada adds 66,800 jobs in Jan, jobless rate rises to 5.8 percent

TORONTO (Reuters) - Canada’s economy added a net 66,800 jobs in January, in both full-time and part-time work, Statistics Canada said on Friday. The jobless rate increased to 5.8 percent.

Market reaction: CAD/

LINK: here

DOUG PORTER, CHIEF ECONOMIST, BMO CAPITAL MARKETS

“In many respects, this is actually a carbon copy of what we saw out of the U.S. in January - a very strong headline job gain, also an increase in the participation rate which drove up the unemployment rate.”

“Perhaps the details didn’t keep up with the headline, but I’m not going to quibble with the report, because even the rise in full-times jobs was well above what anyone was expecting for overall employment.”

“I think for policy, much like the U.S. - I’m not sure that last week’s strong job report really turned many heads, I think most people are still comfortable looking for the Fed to stay on hold for quite a long period of time - and I would say that is probably still the case for the Bank of Canada as well.

“I don’t want to say that employment is a lagging indicator, but it’s not a particularly good leading indicator, it doesn’t really tell us where we’re going next. And I think there are plenty of legitimate concerns about slowing global growth. So it’s an encouraging report but I don’t think it’s going to have a big impact on policy.”

ANDREW KELVIN, SENIOR RATES STRATEGIST AT TD SECURITIES

“I think it is good data. I mean its Canadian jobs data, so you have to take it with a pretty big grain of salt. We were looking for the services sector to add jobs, obviously it added more jobs than we were expecting. I think it does underscore that for all the doom and gloom in the market the Canadian economy is not in a terrible place in quite a few sectors ... outside the energy economy things are pretty robust.”

“They (the Bank of Canada) are still on hold for at least the first half of the year just because they need to see the oil production shock play out.”

PAUL FERLEY, ASSISTANT CHIEF ECONOMIST, ROYAL BANK OF CANADA

“It’s certainly a stronger than expected increase in employment. It suggests labor markets still remain strong but with the wage increase not jeopardizing their inflation target. I think that provides reason for the Bank of Canada to keep any tightening at a gradual pace.

“We’re going to have to see further evidence of strength in the economy and price pressures building in the system confirming the Canadian economy is operating beyond capacity.”

Reporting by Matt Scuffham; Editing by Denny Thomas

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