By Paul Viera
OTTAWA – Canada’s unemployment rate fell to another record low in April, another sign that labor market conditions continue to tighten. Employment growth decelerated sharply during the month after strong gains in February and March.
Statistics Canada reported Friday that employment in Canada increased by 15,300 net jobs in April, well below market expectations for a gain of 40,000 jobs, according to economists at TD Securities. In February and March, the economy created 409,000 net new jobs.
On a monthly average, Canada has created 141,000 net new jobs over the past three months and about 77,000 over the past six months. On a year-over-year basis, employment rose 5.2% in April.
Canada’s unemployment rate, meanwhile, hit a record low for a second straight month, dropping from 5.3% in March to 5.2% in April. Calculated using US Department of Labor methodology, Canada’s unemployment rate in April was 4.2%.
The report was not without flaws. Full-time employment fell by 31,600 in April, although it was still up 4.1% from a year ago. Full-time job losses were offset by more than 47,000 new part-time jobs. Hours worked, a key component in calculating gross domestic product, fell 1.9% in April from the previous month. The data agency attributed the decline to workplace absences linked to Covid-19 infections and a severe snowstorm in western Canada.
Average hourly wage growth was largely flat in April from the previous month, up 3.3% from a year ago. The Bank of Canada said last month, when it raised its policy rate by half a percentage point to 1.0%, that wage growth was accelerating. Central bank No. 2 official Carolyn Rogers said this week that interest rates still had room to climb as the economy recovered “remarkably quickly” from the depths of the pandemic and is now overheating, with annual inflation close to 7%.
Statistics Canada cited other indicators pointing to a tightening labor market. He said the proportion of part-time workers saying they would prefer full-time employment, or the rate of involuntary part-time employment, fell to a record low in April of 15.7%. The involuntary part-time rate peaked at 26.5% in August 2020, after the first months of the pandemic in North America.
Job vacancies in Canada are at an all-time high. The Bank of Canada’s latest quarterly business outlook survey, released last month, indicates that businesses are struggling to meet demand due to acute labor shortages, and most respondents s expect this environment to persist until at least 2023.
Write to Paul Vieira at email@example.com