08:54 AM EST, 02/07/2025 (MT Newswires) -- Employment growth remained hot in Canada in January, but tougher tests are to come as trade uncertainty has risen since this survey was conducted, said CIBC following Friday's Labour Force Survey (LFS).

The 76,000 gain in jobs was well above consensus forecasts of 25,000 and was enough to bring a further decline in the unemployment rate from 6.7% to 6.6% despite a rise in participation, noted the bank.

The employment rate rose for a third consecutive month, although remains well below peaks seen in late 2022/early 2023, pointed out CIBC. Job gains were fairly evenly split between full-time and part-time, and were driven by private-sector hiring.

The sector breakdown was interesting, with manufacturing (up 33,000) actually seeing the largest gain, added the bank. That is the sector likely to be hardest hit by the United States trade tariff uncertainty ahead, and so this advance is unlikely to be repeated.

Wage growth for permanent workers edged down to 3.7% from 3.8% in the prior month while hours worked posted a very healthy 0.9% advance.

Overall, this is a "very positive" report once again, according to CIBC. However, even after the improvement seen during the past two months, the unemployment rate is still only just back to where it stood in October and is still consistent with a labor market with plenty of slack.

The bank continues to think that even lower interest rates will be needed for the economy to fully absorb that slack, particularly given heightened trade uncertainty which could impact hiring decisions ahead.