Employment held steady in February (+22,000; +0.1 per cent), and the unemployment rate was unchanged at 5.0 per cent, reported Statistics Canada on Friday.
The federal agency said employment grew in health care and social assistance (+15,000; +0.6 per cent), public administration (+10,000; +0.9 per cent), and utilities (+7,500; +5.0 per cent). At the same time, fewer people worked in business, building and other support services (-11,000; -1.5 per cent).
“There was little change in employment among core-aged adults (25 to 54 years old) and youth (15 to 24 years old). Employment among those aged 55 to 64 rose by 25,000 (+0.7 per cent) in February, continuing a strong upward trend since August 2022. The number of employees grew in the private sector (+39,000; +0.3 per cent), while there was little change in public sector employment and in the number of self-employed,” it said.
“Employment increased in New Brunswick (+5,100; +1.3 per cent), Manitoba (+4,900; +0.7 per cent), Newfoundland and Labrador (+3,800; +1.6 per cent) and Prince Edward Island (+1,700; +2.0 per cent), and declined in Nova Scotia (-4,700; -0.9 per cent). There was little change in employment in the other provinces.
“Total hours worked rose 0.6 per cent in February and were up 1.4 per cent on a year-over-year basis. Average hourly wages rose 5.4 per cent (+$1.69 to $33.16) on a year-over-year basis in February, compared with 4.5 per cent (+$1.42) in January (not seasonally adjusted).”
StatsCan said the employment rate—the percentage of people aged 15 and older who are employed—was 62.4 per cent in the month, down 0.1 percentage points from the recent high observed in January. The rate in January was the highest since May 2019 (62.5 per cent).
It said the unemployment rate is just shy of the record-low 4.9 per cent observed in June and July of 2022.
Andrew Grantham, an economist with CIBC Economics, said the jobs data is another sign that the Canadian economy has more momentum to start 2023 than had initially been expected.
“The still historically low unemployment rate and strong wage growth will keep the Bank of Canada leaving the door open to future rate hikes, although we still don’t think the data will be strong enough for policymakers to actually walk through that door,” he said.
James Orlando, Senior Economist, TD Economics, said the jobs market in Canada continues to roll.
The employment gain alongside higher wages and people working more hours points to a labour market that refuses to cool. Not to mention, all the job gains were in the private sector where cyclical strength is most apparent. All this means that Canadian incomes are seeing a boost, which will drive more consumer spending, presenting further upside to GDP growth for the first quarter,” he said.
“For the Bank of Canada, the headline print might be more ‘normal’ compared to prior months, but it is still too high. Although the BoC has been effective at slowing the parts of the economy most sensitive to interest rates, and it has seen inflation decelerate confidently, a more decisive turn is needed. Given that the BoC is in wait-and-see mode with its conditional pause, it believes that it is only a matter of time before a slowdown shows up in the broader economy. But with today’s labour market report, it will have to wait a little while longer.”
Nathan Janzen, Assistant Chief Economist, RBC Economics, said the data is notoriously volatile and two years of stop-and-start pandemic lockdowns have probably added to those challenges making the data more difficult to seasonally adjust.
“But the pace and breadth of job gains has been very firm at a time when they were expected to be slowing. Still, the impacts of aggressive Bank of Canada interest rate hikes over the last year are still flowing through to household borrowing costs with a lag. The BoC focused on those building headwinds more than recent economic data in deciding to hold interest rates unchanged earlier this week – the first decision that didn’t involve higher interest rates in a year. Further stronger-than-expected economic data could still push the central bank to re-start hikes, but we still expect the economy will slow more meaningfully going forward and for the BoC to remain in wait-and-see mode for now,” he said.
(Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He works as well as a freelance writer for several national publications and as a consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)
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