Even widespread layoffs across B.C.’s tech sector isn’t slowing the momentum of the province’s labour market.
The West Coast added 7,700 jobs in January at the same time the unemployment rate climbed to 4.4 per cent (+0.3 percentage points) as more workers entered the job market, according to Statistics Canada data released Friday.
The year kicked off with heavy losses in the tech sector (-15,100 jobs) amid cutbacks hitting the industry worldwide.
Tech giants like Microsoft Corp. (Nasdaq:MSFT) and Amazon.com Inc. (Nasdaq:AMZN), which have significant operations in Vancouver, have been among those cutting jobs by the thousands in recent weeks and months. Medium-sized companies like Hootsuite Inc., once considered a local tech darling, have also been laying off workers amid sector-wide belt-tightening.
But even those losses, combined with a string of eight consecutive interest-rate hikes going back to March 2022, weren’t enough to dampen B.C. job growth last month.
The biggest gains were felt in wholesale and retail trade (+18,100 jobs), and accommodation and food services (+7,100 jobs).
“There simply were far, far fewer layoffs than in a normal year at the start of 2023,” BMO (TSX:BMO) chief economist Douglas Porter said in a note, referring to the national numbers.
“Instead of an actual hiring boom, what we instead saw last month was a layoff freeze, given how hard it is to find workers in the current environment”
Canada as a whole added 150,000 jobs overall as the unemployment rate remained unchanged month to month at five per cent.
“Today's report is sure to raise eyebrows at the Bank of Canada,” James Orlando, director of economics at TD Bank (TSX:TD), said in a note.
“Their conditional pause on further rate hikes is predicated on a slowing of economic growth and an easing in the labour market. The Bank won't adjust course after one report, but it will be closely watching to see if this trend of massive job gains continues.”
RBC (TSX:RY) economist Carrie Freestone described the national gains as “jarring.”
“It remains our view that labour markets will not remain this tight over the near term,” she said in a note.
“The delayed impact of the Bank of Canada’s 425 basis points of hikes are still gradually flowing through to household and business debt payments and will ultimately erode demand, pushing unemployment higher through the end of the year.”
Editor's note: An earlier version of this story stated the province added 15,300 jobs in January when in fact it added 7,700 jobs. We regret this error.