Canada kept churning out jobs in March, adding another 19.4k net new positions. More workers were drawn to labour markets, creating an uptick in the participation rate that left the unemployment rate 0.1 percentage point higher at 6.7%.
This fourth straight monthly gain in employment was matched with a fourth straight monthly gain in full-time employment, which was up 18.4k on net.
The relative outperformance of the private sector also continued, adding 13.7k net positions (vs a 12.7k decline in public sector employment). This marks the seventh month in a row of private sector outperformance. With the public-private employment split nearly even, the overall gains in employment were driven largely by self-employment, which rose 18.4k positions on net.
In a break from recent trends, it was the goods-producing sectors that led the way (+21.8k), with gains in manufacturing (+24.4k) and construction (+8.3k) offsetting modest declines elsewhere. On the service side, strong gains in business support services (+18.2k), trade (+16.9k), and information (+10.7) were offset by declines in education (-14.9k), transportation (-12.8k), and a number of other sectors, leaving overall employment in services down 2.4k on the month.
Looking across the country, Alberta led the way, adding 20k net positions, entirely in full-time work. Other provinces reported more mixed performances, with employment falling 11.2k positions in Ontario, and down 5.1k net positions in Saskatchewan.
Hours worked finally ticked back up in March, rising 0.7% year-on-year, halting a three-month decline. The recent soft trend in the hourly wage rate continued however, rising just 0.9% y/y – this measure has only averaged 1.0% growth year-on-year so far in 2017.
Key Implications
There is just no stopping Canadian jobs gains, which once again broke through market expectations. The recent trend of solid full-time employment gains, the turn-around in hours worked, and a seeming stabilization of the participation rate are all signs of a Canadian economy that has started 2017 on the right foot.
Once again, if there is a soft spot to be found, it has to be in the wage data, which is testing depths last seen in the late 1990s. It is difficult to square the soft wage data with the solid employment gains and generally robust economic indicators more broadly, while other data, including less-timely employer-based surveys, still point to healthy wage gains.
Heading into the Bank of Canada’s Wednesday policy interest rate decision, the jobs data will likely have only a marginal impact. It is possible that Governor Poloz may point to the still-soft wage data to reinforce his recent dovish tone, but more likely is a continued focus on the sources of growth and the perceived differences in economic slack vis-à-vis the United States.
