Three Charts That Show Poloz’s Worry About Canada’s Labor MarketBy
Central bank still sees ‘significant slack’ in employment
Wage growth slowing, hours worked are flat and part-time is up
It’s time to tap the brakes on any new-found optimism about Canada’s workers.
Even with the recent flurry of surprisingly strong employment data, the Bank of Canada said Wednesday in its rate decision that indicators “still point to significant slack in the labor market.” The following trends suggest Governor Stephen Poloz and company are wise not to start the parade on Canadian jobs just yet:
Wage growth has slowed since the start of the year, rising just 1.5 percent from a year earlier. That’s far below the long-run average of 2.7 percent growth.
Of the 214,100 jobs created in the last year, 72 percent were part-time positions. Part-time work reached its highest year-over-year increase since 2011 in the last quarter of 2016.
The total number of hours worked by permanent employees is grinding lower and is up an average of just 0.17 percent in the second half of 2016 from a year earlier. That’s the weakest half year for growth in hours since the 2009 recession.