Job­less rate at low­est level

But record low times for wage growth as well

Cape Breton Post - - Business - BY ANDY BLATCHFORD

“The (Bank of Canada) can be ex­pected to use anaemic wage growth to fur­ther down­play the un­em­ploy­ment rate’s de­cline and claim proof of ‘ma­te­rial ex­cess slack’ still be­ing preva­lent in the labour mar­ket,’’ Jimmy Jean, se­nior econ­o­mist for Des­jardins

The un­em­ploy­ment rate fell last month to its low­est level since the start of the last ma­jor re­ces­sion, but de­tails within Sta­tis­tics Canada’s lat­est labour re­port - in­clud­ing a record-low for wage growth - damp­ened what has oth­er­wise been a strong run for the job mar­ket.

Job cre­ation cooled down in April and pro­duced a net in­crease of just 3,200 po­si­tions, a fig­ure so low it was sta­tis­ti­cally in­signif­i­cant, the agency’s work­force sur­vey said Fri­day.

How­ever, Canada man­aged to hang on to the job gains from the un­usu­ally long streak of past months - and over the last year more than two-thirds of the labour-mar­ket growth has been full time, said RBC se­nior econ­o­mist Nathan Janzen.

Year-over-year work­force par­tic­i­pa­tion is up and Janzen noted that April’s 6.5 per cent job­less rate, which dropped from 6.7 per cent in March, is now below its 10-year, pre­re­ces­sion av­er­age level.

The un­em­ploy­ment rate was lower last month than it had been since Oc­to­ber 2008 and 0.6 per­cent­age points lower com­pared to a year ear­lier, as fewer youth searched for work.

Janzen, how­ever, high­lighted in his re­search note to clients that there was a “fly in the oint­ment” - April’s his­tor­i­cally fee­ble wage growth.

“On that one, it’s just puz­zling,’’ Janzen said in an in­ter­view.

“Typ­i­cally, you would say we ac­tu­ally have rel­a­tively tight labour mar­kets, but it’s just not gen­er­at­ing wage growth. So, I think that wage mea­sure is the main one that’s go­ing to keep giv­ing the Bank of Canada pause, and it gives us pause as well.’’

Hourly wages for all em­ploy­ees ex­panded by 0.7 per cent in April, the slow­est year-over-year growth since the fed­eral agency started col­lect­ing that data in Jan­uary 1997. For all per­ma­nent em­ploy­ees, wages ex­panded com­pared to a year ago by just 0.5 per cent - also an all­time low.

Janzen said wage growth is an im­por­tant in­di­ca­tor, par­tic­u­larly for the Bank of Canada as it mulls in­ter­est-rate de­ci­sions. The data points to house­holds’ pur­chas­ing power and the health of their monthly in­come state­ments.

Jimmy Jean, a se­nior econ­o­mist for Des­jardins, called the wages re­sult “dread­ful’’ in his re­search note Fri­day. Jean added that wage growth even man­aged to stay above two per cent dur­ing the 2008-09 re­ces­sion.

“The (Bank of Canada) can be ex­pected to use anaemic wage growth to fur­ther down­play the un­em­ploy­ment rate’s de­cline and claim proof of ‘ma­te­rial ex­cess slack’ still be­ing preva­lent in the labour mar­ket,’’ Jean wrote.

A con­sen­sus of econ­o­mists had ex­pected the un­em­ploy­ment rate to stay at 6.7 per cent, ac­cord­ing to Thom­son Reuters.

Com­pared to a year ear­lier, the data showed that Canada added 275,700 jobs, 189,600 of which were full-time po­si­tions.

A closer look at Fri­day’s data showed a loss of 50,500 po­si­tions in the more-de­sir­able pri­vate-sec­tor cat­e­gory, while the pub­lic sec­tor added 35,200 jobs. There were also 31,200 fewer full-time jobs last month, while the num­ber of part-time po­si­tions grew by 34,300.

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.