Canada Jobless Rate Falls to 2-Year Low Even as Wages LagBy
Full-time jobs gain of 105,100 was biggest in nearly a decade
Concerns persist about quality with hours worked down
Canada’s labor market continued its rally, bringing the unemployment rate to the lowest in more than two years but with continued signs of sluggish wage increases.
The nation added 15,300 jobs in February, and employment has increased by 288,100 over the past 12 months, Statistics Canada said Friday from Ottawa. The unemployment rate fell to 6.6 percent, matching a post-recession low.
The data show a Canadian economy that has begun to deliver new employment after a two-year slump, though concern persists around the quality of those gains. Wages are hardly growing, and people are working fewer hours.
“Overall, this was a good news day for Canada’s workers, but we’re still well behind the U.S. in terms of getting back to full employment and more vibrant wage gains,” Avery Shenfeld, chief economist at CIBC World Markets, said in a note to investors.
Separately Friday, the U.S. Labor Department reported a 235,000 increase in jobs last month, a drop in the jobless rate and year-over-year wage growth of 2.8 percent.
In Canada, average hourly earnings were up 1.3 percent in February from a year ago, almost half the pace of the post-recession era. Wage gains for permanent workers were up 1.1 percent.
Actual hours worked also reported a year-over-year decline in February of 0.3 percent, continuing a trend of shrinking hours worked over the past year.
The Bank of Canada has highlighted “subdued” wage growth and hours worked as evidence of continued lack in the country’s labor market, even with recent job gains.
Still, Canada’s employment gains haven’t looked this strong in years. At 1.6 percent, year-over-year employment growth in February is running at the fastest pace since 2012. The 18,800 jobs created since August is the biggest six-month gain since 2007.
Friday’s report also shows the quality of the job picture is better than what was thought only a month ago, with an improved mix of full-time and part-time jobs. The net job gain reflected an increase of 105,100 full-time jobs, the biggest one-month gain since 2006. Part-time jobs fell by 89,800 during the month. Canada has added 235,400 full-time jobs over the past year versus 52,700 part-time jobs.
Another trend: women made up the bulk of employment gains. Employment of women 25 years and over was up 15,000 during the month, with full-time jobs for this group up 101,100. And most of those new jobs were in services, which saw employment up 30,100 in February, versus a 14,800 decline in goods-producing.
The most surprising element of the report was the split between full-time and part-time work, Andrew Kelvin, senior rates strategist at TD Securities, said in an email. “It’s a pretty massive increase in full-time hiring given the headline change,” he said.