Canada's job market beats expectations in March — and it's finally pushing up wages, too
Jobless rate held steady at 5% as more people looking for work, Statistics Canada said
Canada's economy added 35,000 jobs in March, about three times more than expected.
Statistics Canada reported Thursday that despite the surge in hiring, the jobless rate held steady at five per cent because more people were looking for work, too.
Economists polled by Bloomberg had been expecting the economy to add about 12,000 jobs during the month.
Virtually all the new jobs were in the private sector, as the public sector and self-employment were both essentially flat.
Several industries saw hiring surges, especially service sector jobs like:
- Transportation and warehousing, which added 41,000 workers.
- Building and other support services, up 31,000.
- Finance, insurance, real estate, rental and leasing added 19,000 people.
On the opposite end of the spectrum, these industries lost jobs during the month:
- Construction, down 19,000 workers.
- "Other services" (which includes personal and repair services) lost 11,000.
- Natural resources lost 11,000 jobs.
By province, Ontario added 21,000 jobs, Alberta added 14,000, Manitoba added 3,300 and Prince Edward Island added 1,700. Saskatchewan lost 4,300 jobs and there was little change in the other provinces.
The average hourly wage of a Canadian worker was $33.12 during the month. That's an increase of 5.3 per cent from last year. That's down from February's annual pace of 5.4 per cent, but still above Canada's 5.2 per cent inflation rate.
Wage gains have now outpaced the official inflation rate for two months in a row. That's the first time that's happened since the inflation rate started skyrocketing in late 2021.
Pedro Antunes, chief economist with the Conference Board of Canada, says it took a while, but higher wages are exactly what you'd expect to happen when high inflation sticks around for as long as it has.
When the working theory was that suddenly high inflation was transitory and therefore not expected to last, employers did their best to make sure higher costs weren't baked in with higher wages, Antunes says. But that can only go on for so long.
"A lot of employers say they've been having trouble finding workers, and what do you do? You bid up your offer and that tends to drive wages up," he told CBC News in an interview.
WATCH | The issue with too many high-paying jobs:
A strong job market means employers are having to improve their offers in the war for talent, and that was certainly the tone at a hiring fair in Toronto this week.
After years in the COVID-led doldrums, the tourism industry is bouncing back in a big way, and hotels and other travel related businesses have a strong demand for workers. Georgia Sanderson, director of human resources with the Hyatt Regency Toronto, says the chain is hiring for a couple dozen positions at a handful of hotels in and around Toronto, and she says the benefits and salaries have come up significantly.
"A lot of places are offering hiring bonuses and different benefits to try and encourage people to come back to the industry," she told CBC News in an interview.
A war for talent is great news for workers, but Antunes says counter-intuitively it makes the battle against inflation even harder.
"I don't necessarily think that's bad news, but .. we're in this kind of bizarre world where sometimes the good news is not so good news for the Bank of Canada."
He says he doubts the recent hiring surge will be enough to compel the central bank to deviate from its plan to sit on the sidelines for a while, but ultimately, he says Thursday's job numbers are another sign that the economy seems to be doing better than the worst-case scenario that some had envisioned.
"With the exception of real estate markets where we've seen prices come down, we're continuing to see strong job numbers," he said. "Economic activity as well as some of the latest numbers from Statistics Canada are showing a pretty, pretty strong start to the year."
ABOUT THE AUTHOR
.png)