By Ketki Saxena
Investing.com -- January’s labour force data from Statistics Canada this morning reflects the impact of Omicron on the economy.
The Canadian labour force lost 200,100 jobs in January, largely a result of last month’s fresh Omicron-related lockdowns. 117,000 of jobs lost were full-time, while approximately 83,000 were part-time.
The majority of job losses were in sectors directly impacted by lockdowns and business closures, with accommodation and food accounting for 113,000, or over half, of total job losses. Analysts expect a quick rebound as lockdown measures are lifted across the country.
Interestingly, this report comes just a week after Bank of Canada’s monetary policy report, at which time the BoC indicated the economy was back to operating at full capacity.
As the BoC has essentially established full employment as its de-facto dual mandate along with inflation, analysts took Jan 26th statement as a clear indicator that the first of many rate hikes this year could be expected in March.
The sharper than anticipated decline in the labour market raises the possibility, or provides the perfect excuse for the BoC to delay interest rate hikes yet again as governor Tiff Macklem struggles to find the fine balance between inflation and economic growth.