Canada’s run of job gains stalled in April and wage gains slowed to record lows, casting a shadow over what had been a stellar employment performance.
Canada added 3,200 jobs during the month, Statistics Canada reported in Ottawa, less than the 10,000 employment gain forecast by economists. The pace of annual wage rate increases fell to 0.7 per cent in April, the lowest in records dating back to the late 1990s.
Canada’s unemployment rate fell to 6.5 per cent, the lowest since October 2008, but this reflects the departure of 45,500 people from the labor force. About half of those were youth, meaning many young people looking for work have stopped looking.
Key Points While the number of jobs added was relatively small in April, one-month does not make a trend and the recent employment picture has been strong. The country has had positive job gains for six straight months, and over the past nine months has added 277,000 jobs. That’s the best performance since 2012.
Other positive signs include hours worked numbers that show gains of 1.1 per cent over the past 12 months and the falling unemployment rate.
Yet the wages puzzle, which has been cited by the Bank of Canada as evidence of slack in the economy, persists. There’s little sign that what seems to be a robust employment picture is feeding into wages. In fact, it’s the opposite. For historical perspective, wage gains have averaged 2.7 per cent over the past decade.
Adding to the mystery is that Ontario is the major source of wage sluggishness, with pay increases of 0.2 per cent year-over-year. Full-time jobs also are showing slower wage gains than the national average.
Policy makers at the Bank of Canada have been wary of recent upswing in economy data and this report will probably feed their worries even with the job gains. While economic growth has been accelerated and employers are hiring, it’s tough to conclude the recovery has fully taken hold without a pick-up in wages.
The nation lost 31,200 full-time jobs, and gained 34,300 part-time jobs during the month.
All the job gains were self-employed and public sector. Canada lost 50,500 jobs in the private sector.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.