The Canadian labour market added 35k positions in March, with full-time employment up 18.8k and part-time employment up 15.9k.
The unemployment rate held steady at 5.0% and the participation rate fell 0.1 percentage points to 65.6%.
By industry, employment was up in transportation/warehousing (+41k), business, building and other support services (+31k), and finance, insurance, real estate, rental and leasing (+19k). Losses were seen in construction (-19k), other personal/repair services (-11k), and natural resources (-11k).
Lastly, total hours worked were up 0.4% month-on-month and wages were up 5.3% year-on-year (vs 5.4% in February).
Key Implications
The Canadian jobs market shows no sign of slowing. Today’s gain of 35k jobs extends the streak of monthly employment gains to seven months, bringing the tally to 382k jobs gained over that time. Looking beyond the headline, the fundamentals remain solid. Workers continue to clock in more hours every week and their wages are rising. With all the jobs gained in the private sector (although nearly half were part-time), there is strong underlying momentum that continues to build in the Canadian economy.
The Bank of Canada knows the economy is running too hot. Continued labour market strength is boosting the incomes of Canadians, enabling them to increase their spending notwithstanding the high interest rate environment. Today’s report corroborates the signal we have been getting from credit/debit card spending data, and supports our forecast for Canadian GDP to come in around 2% for the first quarter of 2023. That is not the kind of growth the BoC wants to see when it is trying to ensure that inflation gets back to target. Although today’s report isn’t enough to get the Bank off the sidelines, the fact that nothing so far seems to be able to crack the Canadian jobs market juggernaut must be worrying.
