This job market never seems to run out of gas. Canadian employment edged ahead in March, topping off the first quarter of 2023 in solid fashion after starting off the year with a bang. Similar to recent months, the unemployment rate held low and steady at 5.0%. Instead, job growth was mainly driven by solid population growth, which takes a bit of the shine off the headline numbers. That said, hours worked rose even faster than employment, confirming the solid trend.
Overall job growth was led by the private sector, but developments at the industry level were mixed. Construction fell, reversing some earlier strength, while finance, insurance and real estate rose, after slipping in February. Meanwhile, transportation and warehousing jumped after lagging over the past year. Big picture, it remains tough to tease out industry-level effects from the Bank of Canada’s tightening cycle.
As with recent reports, wage growth remained front and center. Hourly earnings continued to chug above a 5% year-over-year pace. This persistence stands in contrast to signs of softer employer demand. However, between the tug of war between fewer job vacancies, which suggest weaker conditions ahead, against the cumulative tightening of the Canadian labour market over the past year, as the key driver of wage trends, the latter continues to win out. This is good news for Canadian workers if inflation can continue to move in the right direction, but recent strength in prices in the US suggests we can’t breathe easy yet.