Jobless rate falls to 6.5% but wages see weakest growth since 1997
OTTAWA — 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 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 past year more than two-thirds of the labourmarket 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 10year, pre-recession average level.
The unemployment rate was lower last month than it had been since October 2008 and 0.6 percentage points lower than a year earlier, as fewer youth searched for work.
Hamilton’s unemployment rate fell to 5.4 per cent from 5.9 per cent.
Nationally, the news wasn’t all good. In his research note to clients, Janzen highlighted a “fly in the ointment” — April’s historically feeble wage growth.
“On that one, it’s just puzzling,” he said in an interview. “Typically, you would say we actually have 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 expanded by 0.7 per cent in April, the slowest yearover-year growth since the federal agency started collecting that data in January 1997. For all permanent employees, wages expanded by just 0.5 per cent — also an all-time low.
Janzen said wage growth is an important indicator, particularly for the Bank of Canada as it mulls interest-rate decisions.