2023-05-05 21:13:48
Month after month, the labor market continues to defy the recession forecasts for Quebec. In April, there were 10,500 more jobs than in March and the unemployment rate remains near its historic low, at 4.1%.
In Canada, employment is up for the eighth month in a row, according to Statistics Canada. Employment rose by 41,000, twice what economists expected.
The Canadian economy has created almost a quarter of a million jobs since the start of the year, notes Laurentian Bank chief economist Sébastien Lavoie.
Strong immigration continues to stimulate job creation, which favors Ontario, where more than half of the jobs created in April are located.
Sébastien Lavoie, Chief Economist of Laurentian Bank
Employment gains are more modest in Quebec, where labor is scarcer. Of all Canadian urban areas, Quebec has the lowest unemployment rate, at 1.7%. It is 4.6% in the metropolitan region of Montreal.
Mostly part time
All of the jobs created in April were part-time jobs. Full-time employment fell for the first time, which could be a first sign of a slowdown in hiring, according to Randall Bartlett, senior director, Canadian economy, at Desjardins. “The detailed results are not as positive as the aggregate data suggests,” he commented.
Employment increased mainly in four sectors of activity: wholesale and retail trade; transportation and storage; information, culture and leisure; teaching.
Wages are still rising
The average hourly wage continued to increase at a good pace in April. The increase was 5.2%, compared to 5.3% year-on-year the previous month. The minimum wage has increased in four provinces: New Brunswick, Newfoundland, Nova Scotia and Manitoba. Statistics Canada’s April survey does not take into account the $1 per hour increase in the minimum wage in Quebec, in effect since 1is May.
The upward trend in wages could continue as federal public servants entered into employment contracts that provide for annual salary increases of more than 3%.
“The labor market must rebalance and wage growth moderate” for inflation to return to the 2% target, Bank of Canada Governor Tiff Macklem said in a speech in Toronto on Thursday.
hot and cold
The job market, which continues to grow, and rising wages are making it difficult for the Bank of Canada, which has raised its key rate eight times to slow the economy and bring inflation back to the 2% target.
Other important indicators are also showing more resilience than expected. This is the case of the housing market, which was less shaken than expected and which seems to be starting to stabilize.
“With interest rates having reached their current level at the fastest pace in a generation, the recent correction in the housing market should normally have been more pronounced than it has been”, underlines the economist of Desjardins.
This development could prompt the Bank of Canada to end its pause and announce another rate hike, which is still a possibility, according to most economists.
On the other hand, falling inflation, from 8.1% a year ago to 4.3% in March, and the banking crisis that is simmering in the United States are elements that encourage the central bank to be cautious.
The unemployment rate at 3.4% in the United States
The job market remains strong in the United States where, despite interest rate hikes, the unemployment rate fell from 3.5% in March to 3.4% in April, its lowest level since 1969. The economy added 253,000 jobs and the average hourly wage continued to rise, at an annual rate of 4.4%. Employment continues to rise in business services, health care, recreation and hospitality, and social assistance. President Joe Biden praised the numbers in a tweet: “My program for investing in America is working. A decline in job creation and a rise in the unemployment rate are however expected to manage to curb inflation. This, still very strong, had been fueled, among other things, by the significant growth in wages linked to the lack of manpower. The Federal Reserve raised rates again on Wednesday, for the 10e times in a row.
Helen Baril, The Press
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