MNI: Canada Has Biggest Job Gain Since Jan 2023, Wages Slow
Canadian employment rose much faster than economists predicted in April with the biggest gain since January of last year, still not enough to lower the highest unemployment rate since 2017 outside of the pandemic, while wage growth closely tracked by the central bank slipped below 5%.
Employment rose 90,400 versus a market consensus for 15,000 in Statistics Canada's report Friday from Ottawa. Unemployment was unchanged at 6.1% instead of the expected increase to 6.2%. That was because the job gain lagged a 107,500 labor-force increase fueled by record immigration.
Job gains were split between 50,300 lower-paying part-time jobs and 40,100 full-time positions. Average hourly wage growth eased to 4.7% from 5.1%, the slowest since June of last year, while hours worked climbed 1.2% from a year earlier.
The report complicates Bank of Canada's deliberations ahead of its meeting next month where Governor Tiff Macklem has said a cut is in the realm of possibility. While the job growth is undeniable and contrasts with weakness shown in the latest U.S. report, unemployment remains a percentage point higher than a year ago, the kind of slack the Bank has said is opening up following 10 interest-rate hikes. Officials may also welcome a report adding to its confidence in early signs that wage growth is moderating from the 5% pace they have said is at odds with stagnant worker productivity.
There were other mixed signs in the report. While private-sector employment rose by about 50,000 for the first meaningful increase in four months, over the past year the gains have been much slower than the public sector, a sign of weak demand. The number of unemployed people has also increased by 256,000 or 24% over the past year.