CIBC Says Canada's Labor Report for January Is A "Mixed Bag"; Still Sees Bank of Canada on Hold for Rest of The Year

08:54 AM EST, 02/06/2026 (MT Newswires) -- Employment in Canada fell to start the year, but with fewer people seeking jobs, the unemployment rate also surprisingly came down, said CIBC after Friday's Labour Force Survey (LFS).

The 25,000 decline in employment compared with a consensus expectation for a 5,000 gain, although the reduction was driven exclusively by part-time positions (-70,000), with full-time jobs actually increasing, noted the bank.

The industry breakdown showed declines in manufacturing and education, partly offset by increases in sectors such as information & recreation and business & building services. With the participation rate slumping to 65.0%, from 65.4%, the unemployment rate dropped to 6.5% despite the decline in employment. The employment-to-population ratio edged down, including for prime-aged (25-54) workers, while hourly wage inflation for permanent workers eased to 3.3% year over year, from 3.7%.

Overall, Friday's employment report was very much a "mixed bag," with both employment and unemployment apparently declining in the same month, stated CIBC.

As a result, CIBC doubts this will have much impact at the Bank of Canada, and it doesn't change its view that interest rates will be on hold for the remainder of this year.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.