- Canada Jobless Rate Falls to Two-Year Low Even as Wages Lag
Canada’s labor market continued its rally into February, bringing the unemployment rate to the lowest in more than two years, but with continued signs of sluggish wage increases.
Canada added 15,300 jobs in February, and employment has increased by 288,100 over the past 12 months, Statistics Canada reported today in Ottawa. The unemployment rate fell to 6.6 percent, matching the lowest since January, 2015 which was the lowest since 2008. The net job gain reflected an increase of 105,100 full-time jobs and a drop of 89,800 part-time.
* Canada’s employment gains have accelerated, and at 1.6 percent year-over-year growth are running at the fastest pace since 2012.
* Today’s report shows the quality of the job picture is better than what was thought only a month ago, with an improved mix of full-time and part-time jobs. The full-time gain in February was the biggest since May 2006. Canada has added 235,400 full-time jobs over the past year versus 52,700 part-time jobs.
* But the data also show that the biggest concern for policy makers — wage growth and hours worked — persists. Average hourly earnings were up 1.3 percent in February from a year ago (versus 1.2 percent in January). That’s well below the historical average. Wage gains for permanent workers were up 1.1 percent (versus 1.0 percent in January), also well below historical average.
* Actual hours worked also reported a year-over-year decline in February of 0.3 percent, continuing a trend of shrinking hours worked over the past year.
Canadian employment growth has been supporting household spending growth, though there are worries around the quality of those gains. The Bank of Canada has highlighted “subdued” wage growth and hours worked as evidence of continued lack in the country’s labor market, even with recent job gains.
* Services-related employment was up 30,100 in February, versus a 14,800 decline in goods-producing. That’s an extension of recent employment trends.
* Women made up the bulk of employment gains. Employment of women 25 years and over was up 15,000 during the month, with full-time jobs for this group up 101,100.