The unemployment rate fell to 6.5% in January, better than expectations for the print to stay flat M/M at 6.8%…

… despite a net 25K drop in employment, with a second straight month of full-time adds (up 45K) more than offset by part-time losses (down 70K)…

… anchored by manufacturing and educational services at the industry level.

So the real driver wasn’t labour market improvement, but weaker workforce engagement - with the participation rate falling to 65%.

That drawdown should be transitory, with only a small increase in discouraged job seekers - but if vacancies don’t improve…

… unemployment duration could keep grinding higher, encouraging something more structural in nature.

You might be interested in…

About Bullpen: Bullpen Finance Inc. publishes content on Canadian markets and provides paid research coverage of select Canadian issuers. Bullpen is paid in cash by covered issuers, does not accept stock or options, does not hold positions in covered securities, and does not conduct investment banking business. Bullpen and LodeRock Advisors Inc. are affiliated; LodeRock provides investor relations services to issuers, some of whom are covered by Bullpen Research. When a post discusses a covered issuer, a specific disclosure appears at the top of the post. This post is published for general information purposes. It is not personalized investment advice and is not tailored to any individual reader’s circumstances. Bullpen is not a registered investment adviser or dealer. For full disclosures, including analyst certification, jurisdictional statements, and conflict of interest policies, please see our Legal & Disclosures section on our website.