Canadian labour working wonders
ottawa — Canada’s labour market continued its stellar performance in May, with a greater-thanexpected 54,500 jobs gain that also finally came with signs of a pick-up in wages.
The employment gain — the third-biggest one-month increase in the past five years — was driven by the addition of 77,000 new fulltime jobs, which offset falling parttime employment.
Economists had forecast a 15,000 increase in employment.
Key points
The 316,800 new jobs over the past year is the biggest 12-month gain since February 2013 — and levels the economy has seldom produced since the 2008-09 recession.
Is the wages puzzle — slumping earnings gains in the face of sharp increases in employment — being resolved? The pace of annual wage rate increases accelerated to 1.3 per cent in May, after falling to a record-low 0.7 per cent in April. Another sign of potential tightness in the market is that wages for temporary workers are up 4.8 per cent year-over-year.
It’s not just services. Manufacturing added 25,300 jobs during the month and the embattled sector has produced a 43,000 employment increase so far this year. The increase in May is the biggest since 2002. Still, services have done the heavy lifting over the past year, accounting for 295,200 of the new jobs.
Big picture
The employment gains bode well for the continuation of the country’s expansion, which is the fastest among the Group of Seven, as Canada emerges from the oil price collapse and benefits from a soaring real estate market.
It also could raise pressure on the Bank of Canada, which has been citing worries about slack in the economy for being cautious, to increase rates sooner. A separate report released on Friday by Statistics Canada showed utilisation of industrial capacity at the highest 2007.
Economists anticipate a rate increase in the first half of next year.
Other important details:
Canada’s unemployment rate increased to 6.6 percent in May, in line with economist expectations, from 6.5 per cent in April. The increase in unemployment was due to the entry of 78,400 Canadians into the labour force in May.
The one negative from Sunday’s release was a slowing in total actual hours worked, to 0.7 per cent annual from 1.1 per cent in April.
Adjusted to the way calculations are made in the US, Canada’s unemployment rate was 5.6 per cent in May, compared with 4.3 per cent in the US.
Quebec’s unemployment rate fell to a record low of six percent. Manitoba has the lowest unemployment rate in the country, at 5.3 per cent.