The Canadian labour market added 41.4k positions in April, with full-time employment down 6.2k and part-time employment up 47.6k.
The unemployment rate held steady at 5.0% and the participation rate held at 65.6%.
Employment was up in highly cyclical industries: wholesale/retail trade (+24k), transportation/warehousing (+17k), and information, culture and recreation (+16k). A decline was seen in business, building and other support services (-14k), but this was just an offset from last month’s big gain.
Lastly, total hours worked were up 0.2% month-on-month and wages were up 5.2% year-on-year (vs 5.3% in March).
Key Implications
Once again, the Canadian jobs market surprises to the upside. Over the last seven months, employment has risen 412k, three times the trend pace over the 2010 to 2019 time period. This has been driven by rapid population growth, which has surged by a million people in the last year. The supply of workers has been boosted, enabling firms to put a big dent in the number of job vacancies.
The BoC won’t change its policy stance based on this report. The inflow of new Canadians is changing the calculus on what a standard jobs report looks like. The fact that the unemployment rate has been stable means that we may have reached a new steady state. This means that the ‘surprise’ employment report isn’t adding the same labour market tightness as it would have in the past. Plus, the BoC can always focus on the lack of breath in sector hiring and the fact that this print was driven by part-time employment, with full-time employment going negative. All told, the BoC’s position on the sidelines is probably more stable following today’s release.
