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Labour Force Survey Wage Growth Misses But Still Yet To Match Softer Indicators

CANADA DATA
Homepagemarkets-real-timeBulletMarketsFixed Income BulletsForeign Exchange BulletsCanada Bank of Canada Market NewsEarnings Calendar Market News
  • Canadian employment growth doubled expectations in February at a seasonally adjusted 40.7k (cons 20k) but wage growth was softer than expected.
  • The hourly wage for permanent employees increased 4.9% Y/Y (BBG cons 5.1), its first sub-5% reading since June, after 5.3% in Jan and a particularly strong 5.7% in Dec.
  • Hourly wage growth for all employees meanwhile eased to 5.0% from 5.3% in Jan and 5.4% in Dec.
  • Despite the moderation, both measures hold right at the top of the 4-5% range that the Bank has been noting for some months now.
  • However, the BoC on Wed acknowledged that “there are now some signs that wage pressures may be easing”. Whilst these labour force survey data remain firm, payrolled employee wage growth was just 2.1% Y/Y (2.4% Y/Y fixed-weight) back in Dec.
  • Further, yesterday also saw some long-awaited positive productivity growth in Q4 data, rising 1.7% annualized along with some net positive revisions that left the Q3 level 0.8% higher than previously thought. Combined with hourly compensation increasing a mild 1.3% annualized in this data, unit labor costs saw there first decline since 3Q20, albeit only limited, after some particularly strong increases.
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  • Canadian employment growth doubled expectations in February at a seasonally adjusted 40.7k (cons 20k) but wage growth was softer than expected.
  • The hourly wage for permanent employees increased 4.9% Y/Y (BBG cons 5.1), its first sub-5% reading since June, after 5.3% in Jan and a particularly strong 5.7% in Dec.
  • Hourly wage growth for all employees meanwhile eased to 5.0% from 5.3% in Jan and 5.4% in Dec.
  • Despite the moderation, both measures hold right at the top of the 4-5% range that the Bank has been noting for some months now.
  • However, the BoC on Wed acknowledged that “there are now some signs that wage pressures may be easing”. Whilst these labour force survey data remain firm, payrolled employee wage growth was just 2.1% Y/Y (2.4% Y/Y fixed-weight) back in Dec.
  • Further, yesterday also saw some long-awaited positive productivity growth in Q4 data, rising 1.7% annualized along with some net positive revisions that left the Q3 level 0.8% higher than previously thought. Combined with hourly compensation increasing a mild 1.3% annualized in this data, unit labor costs saw there first decline since 3Q20, albeit only limited, after some particularly strong increases.