07:13 AM EST, 02/10/2025 (MT Newswires) -- Canadian Labour Force Survey for January suggested that businesses have picked up the rate of hiring, a trend that has generally been in place since November, said Geoff Phipps, portfolio manager and trading strategist at Picton Mahoney Asset Management, after Friday's LFS.

Friday's data was highlighted by 51,000 more jobs added than the economist consensus, resulting in the unemployment rate ticking down to 6.6% from 6.7%. The participation rate increased by the same amount as the jobless rate declined, noted Phipps.

Manufacturing jobs contributed most heavily to the higher-than-expected headline increase in jobs. Given the high exposure of this sector to United States trade, there will likely be some concerns as to the sustainability of hiring in this sector given concerns of U.S. tariffs, as well as retaliatory tariffs from Canada, stated the portfolio manager.

The Bank of Canada, by all indications, is taking the threat of tariffs seriously in its policy setting. The potential hits to Canada's growth outlook from even a watered-down version of the proposed U.S. tariffs would have an enormous impact on gross domestic product if sustained, according to Phipps.

Markets are still pricing the BoC being more likely to cut than hold rates steady at the March meeting, pointed out the Picton Mahoney Asset Management portfolio manager.

With inflation steady around the 2% target and wage growth cooling, Canada's central bank has room to cut rates in upcoming meetings to address potential growth shocks from a trade war, he added.