The Canadian labour market gained 337k positions in February, more than offsetting January’s loss of 200k. Full-time (122k) and part-time (215k) employment both rose strongly on the month.
The unemployment rate dropped massively, by one percentage point, to 5.5%. The participation rate also rose by 0.4 percentage points, to 65.4%.
By industry, services-producing employment rose 293k, with food services leading the way, up 114k. Meanwhile, employment increased in the goods-producing sector (44k), with the construction industry (37k) once again driving the gains.
Employment was up in eight provinces, led by Ontario (194k) and Quebec (82k) as these two provinces were most impacted by the paring back of public health restrictions.
Lastly, total hours worked rose 3.6% month-on-month to a new record high and wage growth accelerated to 3.1% year-on-year (from 2.4% in January).
Key Implications
What a report! With this jobs report, the unemployment rate is now below the level from February 2020, leaving little doubt that the economy is at full employment.
It wasn’t just the job gains. More Canadians entered the labour force, the number of hours worked increased, and wages picked up. The strength of the Canadian labour market cannot be denied.
The incredible resiliency of the Canadian economy sets up the Bank of Canada to continue raising rates at its upcoming meetings. Bond markets have moved to reflect this, with yields rising significantly over the last few trading sessions. With inflation the main concern for the Bank, the path to higher rates has been cleared.
