Month after month, the labor market continues to defy the recession forecasts for Quebec. There were 10,500 more jobs in April than in March and the unemployment rate remains near its historic low, at 4.1%.
In Canada, employment is up for the eighth month in a row, according to Statistics Canada. Employment rose by 41,000, twice what economists had expected.
The Canadian economy has created almost a quarter of a million jobs since the start of the year, notes Laurentian Bank chief economist Sébastien Lavoie.
Job gains are more modest in Quebec, where labor is scarcer. Of all Canadian urban areas, Quebec City has the lowest unemployment rate, at 1.7%. It is 4.6% in the Montreal metropolitan area.
All of the jobs created in April were part-time jobs. Full-time employment fell for the first time, which could be a first sign of a slowdown in hiring, according to Randall Bartlett, senior director, Canadian economy, at Desjardins. “The detailed results are not as positive as the aggregate data suggests,” he commented.
Employment increased primarily in four industries: wholesale and retail trade; transportation and storage; information, culture and recreation; teaching.
The average hourly wage continued to increase at a good pace in April. The increase was 5.2%, compared to 5.3% year-on-year the previous month. The minimum wage has increased in four provinces: New Brunswick, Newfoundland, Nova Scotia and Manitoba. Statistics Canada’s April survey does not take into account the $1 per hour increase in the minimum wage in Quebec, in effect since May 1. The upward trend in salaries could continue as federal public servants entered into employment contracts that provide for annual salary increases of more than 3%.
“The labor market must rebalance and wage growth moderate” for inflation to return to the 2% target, Bank of Canada Governor Tiff Macklem said in a speech in Toronto on Thursday.
The job market, which continues to grow and wages which are rising, complicate the task of the Bank of Canada, which has increased its key rate eight times to slow the economy and bring inflation back to the target of 2%. Other important indicators are also showing more resilience than expected. This is the case of the housing market, which was less shaken than expected and which seems to be starting to stabilize.
“With interest rates reaching their current level at the fastest pace in a generation, the recent correction in the housing market should normally have been more pronounced than it has been,” the economist said. of Desjardins.
This development could prompt the Bank of Canada to end its pause and announce another rate hike, which is still a possibility, according to most economists.
On the other hand, falling inflation, from 8.1% a year ago to 4.3% in March, and the simmering banking crisis in the United States are elements that encourage the central bank to be cautious.
The job market remains solid in the United States where, despite interest rate hikes, the unemployment rate fell from 3.5% in March to 3.4% in April, its lowest level since 1969. The economy boasts 253,000 more jobs and the average hourly wage continues to rise, at an annual rate of 4.4%. Employment remains up in business services, health care, recreation and hospitality, and social care. President Joe Biden praised the numbers in a tweet: “My program for investing in America is working. A decline in job creation and a rise in the unemployment rate are however expected to manage to curb inflation. This, still very strong, had been fueled, among other things, by the significant growth in wages linked to the lack of manpower. The Federal Reserve raised rates again on Wednesday, for the 10th time in a row.