Canada's unemployment rate unexpectedly dropped, signaling signs of a recovery in the job market.

The latest data shows that the unemployment rate in Canada unexpectedly decreased in January, and the job market continues to show steady growth. This change indicates that, excluding the special circumstances during the COVID-19 pandemic, Canada's unemployment rate is starting to fall from the eight-year high set in November of last year. According to data released by Statistics Canada on Friday, the unemployment rate in January was 6.6%, lower than the previous month's 6.7%. During the same period, the Canadian economy added a net 76,000 jobs, although lower than the revised 91,000 new jobs in December, it still showed strong performance. Analysts surveyed by the media had previously predicted only 25,000 new jobs in January, with the unemployment rate expected to rise to 6.8%. However, the actual data has exceeded market expectations for the second consecutive month, and the decrease in the unemployment rate indicates that the job market is gradually warming up. Despite the decrease in the unemployment rate, Canada's total unemployed population remains around 1.5 million, indicating that the job market still faces challenges. The Statistics Canada stated: "This indicates that despite recent strong employment growth, many unemployed individuals are still having difficulty finding work." In 2023, the Canadian economy has been in a recession, and a significant interest rate cut has not effectively stimulated consumer spending and business investment. However, the Bank of Canada stated last month that the job market is still weak but showing signs of improvement. The quick 200 basis point rate cut measures taken by the central bank are helping business activity rebound and driving consumer spending growth. Although there are signs of recovery in the job market, future economic growth still faces challenges. Threats of US tariffs on Canadian goods and a sharp decline in immigration numbers may affect economic activity. The Bank of Canada's latest survey shows that many businesses are cautious about hiring this year. Economists say that if the US imposes tariffs, the Bank of Canada may have to continue cutting interest rates to support economic growth. Meanwhile, the Canadian dollar rose slightly by 0.1% after the employment data was released, trading at 1 Canadian dollar to 1.4296 US dollars, or 69.95 US cents. Following the release of the employment report, the market's bet on a 25 basis point rate cut by the Bank of Canada in March decreased from 72% to 58%. Statistics Canada pointed out that the new jobs added in January were relatively evenly distributed between part-time and full-time positions, mainly concentrated in the manufacturing, professional, scientific, and technical services sectors. In addition, the employment situation for the youth group (aged 15-24) with high long-term unemployment rates has improved. Employment in this age group increased by 1.1%, and the unemployment rate dropped from 14.2% to 13.6%. In terms of wages, the average hourly wage for permanent employees in Canada increased by 3.7% year-on-year in January, slightly lower than the revised 3.8% in December. The slowdown in wage growth is one of the inflation trends closely monitored by the Bank of Canada, which may affect its future monetary policy decisions. Furthermore, the employment rate in January (the proportion of employed persons aged 15 and over) increased by 0.1 percentage points to 61.1%, achieving growth for three consecutive months.