‘Gang­busters’ data bump job­less rate to 40-year low, wage growth slows again

Journal Pioneer - - BUSINESS -

A blast of new jobs last month knocked the coun­try’s un­em­ploy­ment rate down to its low­est level since Statis­tics Canada started mea­sur­ing com­pa­ra­ble data more than 40 years ago -but de­spite eye-catch­ing progress, Fri­day’s num­bers also de­liv­ered dis­ap­point­ment.

Canada added 94,100 net jobs for its largest monthly in­crease since March 2012 when there was a gain of 94,000 jobs, Statis­tics Canada said in its the labour force sur­vey. The Novem­ber surge was fu­elled by other pos­i­tives: 89,900 new full-time po­si­tions and 78,600 em­ployee jobs in the pri­vate sec­tor.

The job­less rate fell to 5.6 per cent last month from Oc­to­ber’s read­ing of 5.8 per cent, which had been the pre­vi­ous low mark since com­pa­ra­ble data first be­came avail­able in 1976. The old sta­tis­ti­cal ap­proach - prior to 1976 reg­is­tered an un­em­ploy­ment rate read­ing of 5.4 per cent in 1974. The im­prove­ments, how­ever, ob­scured a key piece of data: weak­en­ing wage growth.

Year-over-year av­er­age hourly wage growth for per­ma­nent em­ploy­ees con­tin­ued its de­cline in Novem­ber to 1.46 per cent - its low­est read­ing since July 2017.

“There’s no ques­tion that the head­line job growth is gang­busters strong,” said Frances Don­ald, head of macroe­co­nomic strat­egy at Man­ulife As­set Man­age­ment “I would cau­tion us against cel­e­brat­ing too quickly, how­ever, be­cause wage growth is de­cel­er­at­ing sharply.” Ex­perts have been ex­pect­ing wage growth to pick up its pace, thanks to the tight­ened labour mar­ket. But the op­po­site has been hap­pen­ing - wage growth has dropped ev­ery month since its May peak of 3.9 per cent and now sits well be­low in­fla­tion. The Bank of Canada keeps a close watch on wages ahead of its in­ter­est-rate de­ci­sions.

The cen­tral bank has raised the rate five times since the sum­mer of 2017 in re­sponse to Canada’s strong eco­nomic per­for­mance. Gov­er­nor Stephen Poloz has sig­nalled that more in­creases will be needed to keep in­fla­tion from ris­ing too high.

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