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MNI BOC State of Play: Wages Catching Up?

By Yali N'Diaye
     OTTAWA (MNI) - While the Bank of Canada is watching the impact of the
Canadian dollar on exports at a time the latter are weakening, it was likely
comforted by Friday's jobs report.
     The September overall job creation number was less than half the August
figure - 10,000 versus 22,200 - but details were much stronger.
     The net 10,000 increase, which marked the tenth consecutive monthly rise,
owed to the strength of full-time employment, which surged 112,000, its largest
gain since May 2006.
     Year-to-date data showed full-time has definitely taken over from part-time
as the engine of job creation, with 252,200 full time positions added since
January, compared with 37,000 over the same period in 2016. Meanwhile, 23,200
part-time positions have been shed year-to-date, while 101,300 part-time jobs
were created between January and September last year.
     Hours worked rose 2.4% year-over-year in September after a 2.2% increase in
     More importantly, wages increased faster for those working, perhaps
catching up to the persistent strength of employment this year.
     Hourly wages of permanent employees were up 2.2% year-over-year in
September, up from 1.7% in August.
     Weekly average wage growth for all employees also accelerated to 2.2%
year-over-year in September, the largest increase since April 2016, and
following gains of a 1.8% in August, and 1.3% in May through July.
     And while youth unemployment is what keeps Governor Stephen Poloz up at
night, the unemployment rate for the age group of 15 to 24 years dropped more
than a full point to 10.3% in September from 11.5% in August, the lowest rate
since records began in 1976, faster than the 0.7-point decline in the
participation rate.
     Clearly, Friday's data will keep the normalization theme alive.
     That being said, the recent comments from Poloz stressing the bank's
cautious approach as it moves forward, and concerns about the appreciation of
the Canadian dollar's impact, could translate into a pause in the fall, allowing
the central bank to assess the extent of the growth slowdown in the second half
of the year.
     It would also give more time to gauge the impact on inflation for higher
wage growth and whether the latter is persisting. 
--MNI Ottawa Bureau; +1 613 869-0916; email:
[TOPICS: M$C$$$]

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