Ottawa-Gatineau unemployment rate drops to five-year low of 5.7%

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The unemployment rate in the National Capital Region hit its lowest level since September 2011 last month, driven in large part by a rapidly expanding federal government, Statistics Canada said Friday.

Employers in Ottawa and Gatineau collectively added 2,600 workers to their payrolls in January, according to Statistics Canada, which uses a seasonally adjusted three-month rolling average to report region-wide employment figures. This helped to set a record employment high of 725,100 local residents.

Combined with a modest decline in the labour force, this pushed the unemployment rate down to 5.7 per cent from 6.1 per cent in December.

The impact of the strengthening local labour market is already being felt across the wider economy.

Earlier this week, the Canada Mortgage and Housing Corp. credited rising employment levels for pushing up the number of new housing starts in Ottawa.

According to unadjusted, three-month moving averages, the federal government added 2,600 jobs in the region last month. Since July, the federal government has expanded its local workforce by a staggering 16 per cent, or 20,200 individuals, bringing the number of federal civil servants to 147,700 – a level not seen since March 2010.

The closely watched technology sector, meanwhile, lost jobs for the fourth straight month as employers shed 1,100 staff. However, the 40,400 individuals working in the tech sector last month is still higher than the levels recorded throughout much of 2015 and the first half of 2016.

Nationally, Canada’s labour market unexpectedly added 48,300 jobs last month thanks to surges in part-time and private-sector work, Statistics Canada said.

The agency's January employment survey showed an increase of 32,400 part-time positions and a smaller gain of 15,800 jobs in the more-desirable category of full-time work. Both numbers, however, were too low to be deemed statistically significant.

The report also found that private-sector jobs rose 32,400 between December and January, compared with an increase of 7,700 public-sector positions.

The increases helped drop the unemployment rate last month to 6.8 per cent from 6.9 per cent.

Economists had projected the job numbers to stay unchanged last month and for the unemployment rate to hold at 6.9 per cent, according to Thomson Reuters.

The vast majority of the new jobs – 42,600 positions – were created in the services sector, with the bulk of those concentrated in areas such as finance, insurance, real estate, business management, transportation and warehousing.

The number of factory jobs in Canada increased by 5,600 positions last month.

The category of self-employed positions added 8,200 last month while paid employee jobs climbed by 40,000.

The country's job market has seen gains in five out of the last six monthly reports.

In December, the overall labour force expanded by 53,700 net jobs compared with the previous month.Looking back 12 months, Canada gained 276,100 net new jobs overall with the addition of 86,200 full-time positions and 189,900 part-time jobs.

Among the provinces, Ontario gained the most jobs last month with 28,800 new positions, an increase of 0.4 per cent compared with December. Most of those new jobs, or 23,500 positions, were part time.

The overall number of jobs in Alberta last month was essentially unchanged compared to December, but the province did shed 24,300 full-time positions.The report was stronger for British Columbia, which gained 11,200 net new positions last month thanks to a month-over-month increase of 25,400 full-time jobs.

Statistics Canada also found the national youth unemployment rate rose in January to 13.3 per cent, up from 12.6 per cent.

– With reporting by the Canadian Press