Highlights:
- 19K jobs created in March and labour force rebounded sharply by 47K
- Unemployment rate increased to 6.7%
- Full-time jobs up 18K with 1K rise in part-time. In Q1 2017, 139K full-time positions were created
- Service sector employment fell 2K while goods producers created 22K positions as manufacturers added 24K workers
- The participation rate recovered to 65.9% backed by a 0.3ppt rise in participation by prime-aged workers
- Hours worked jumped 1.1% in March skating the year ago rate back into positive territory
- Wage growth remains disappointing, earnings for permanent workers up only 0.9% from year ago
Our Take:
The run of employment gains kept going in March with this morning’s report showing 19.4K positions were added. That means 276K more people were working compared to a year earlier. This jibes with the strong acceleration in real GDP that started in the middle of 2016. Heading into next week’s Bank of Canada meeting this data run gives the Bank a lot of think about. Real GDP is on track to beat the Bank’s forecasts for a third consecutive quarter and the unemployment rate at 6.7% remains below the 10-year pre-recession average, a time when the economy was considered to be at full-employment. See our assessment of current conditions here.
To be sure, the weak wage growth suggests that there remains residual slack in the labour market. Hours worked also remained tepid as even with March’s rebound hours stood 0.2% lower in the first quarter than a year earlier. We expect wages and hours worked will catch-up to the strong gains in employment and growth in the months ahead. We will watch closely to see how the Bank incorporates the data into their forecasts. The Governor’s commentary last month hinted that he thinks it will take some time before the economy will reach full employment meaning rate hikes are unlikely to be on the table anytime soon.
