OTTAWA — Lose 25,000 jobs. Watch unemployment fall. Welcome to Statistics Canada, February edition.
The January labour force survey landed Friday with its usual thud, and the headline numbers immediately started fighting each other. The economy shed positions — 25,000 gone, mostly part-time, mostly women 25 to 54, mostly in manufacturing and the private sector. Not great.
Not catastrophic. Just... not good.
Yet the unemployment rate dropped to 6.5%. Down from 6.7%. A " improvement," technically.
Here's the catch: nobody found work. They just stopped looking.
The participation rate — the share of working-age Canadians either employed or actively searching — fell 0.4 percentage points to 65%. That's 0.4% of the workforce vanishing from the official count, not because they got hired, but because they gave up, retired early, or fell through the cracks. StatCan noted 0.3% of those not in the labour force qualified as "discouraged job seekers," a bureaucratic term for people who want jobs but stopped believing they'll find one.
"You're seeing the statistical illusion of progress," said one economist at a Toronto bank who requested anonymity because they weren't authorized to speak publicly. "The unemployment rate is a denominator problem. Shrink the labour force fast enough, any job loss looks manageable."
Manufacturing took the hardest hit — 28,000 positions gone, concentrated in Ontario and Quebec. The tariff uncertainty with Washington isn't helping. Neither is the dollar. Full-time employment actually grew by 45,000, which sounds healthy until you realize it came at the expense of 70,000 part-time jobs. People aren't trading up. They're scrambling.
Windsor, already battered, saw unemployment climb to 8.1% despite shedding 4,600 workers from its official labour force. The city lost more people than jobs. That's not recovery. That's contraction wearing makeup.
January marked the first net job loss since August. The employment rate — the share of working-age Canadians actually working — slipped to 60.8%. Every metric that measures reality got worse. Every metric that makes headlines got better.
The Bank of Canada watches these numbers. So do politicians. The question is which numbers they're choosing to see.
What actually happened
- Net jobs: -24,800 to -25,000 (sources vary slightly)
- Unemployment rate: 6.5% (down from 6.7%)
- Participation rate: 65% (down 0.4 points)
- Manufacturing: -28,000
- Part-time: -70,000
- Full-time: +45,000
- Employment rate: 60.8% (down 0.1)
The catch: Fewer people looking for work artificially depressed the unemployment rate despite actual job losses.
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