Still going strong-(ish)

A few days ago a young man in my town wrote a post on one of our community Facebook groups, asking for suggestions about where he might find work.  I and others were able to point to help-wanted ads at the local supermarket, hardware store, several restaurants, a seniors residence and more.  Employers in our town (and the Niagara region as a whole) are finding it harder and harder to find the workers they need.

This morning StatsCan reported the results of its labour force survey for September, and it's clear that the tightness in the job market is not confined to our little area.  After an unexpected decline in August, employment across Canada rose by 63,000 in the month, dropping the unemployment rate fractionally to 5.9 percent.  The monthly gain was more than fully accounted for by a rise of 80,000 in part-time employment, but on a year-on-year basis, the 222,000 increase in the number employed is fully accounted for by full-time jobs.

Interestingly, the biggest job gain was recorded in Ontario, which saw an employment increase of 36,000 positions, all part-time in nature.  This is the third increase in employment in Canada's largest province in the past four months. However, a rising participation rate resulted in a small increase in the provincial unemployment rate, which now matches the national figure of 5.9 percent.

Just this week, the new Doug Ford government announced that it would repeal the previous government's labour reform bill, which had increased the minimum wage and provided improvements to workers' non-wage benefits.  Ford bellowed in the provincial legislature that the reforms had cost the province "60,000 jobs". It's true that employment fell by that amount in January, the first month of the higher minimum wage, but given that employment fell in most parts of Canada in that month, it's hardly likely that Ontario's wage policy was the culprit.  As StatsCan reported this morning, employment in Ontario is up by 103,000 in the past twelve months, all accounted for by full-time jobs.  Don't expect Doug Ford to mention that any time soon.

An unemployment rate just below 6 percent on a national level is as close to full employment as Canada is ever likely to get, given the structural factors that bias unemployment higher in the four Atlantic provinces.  Wage pressures remain relatively well-contained, with average hourly earnings up 2.3 percent year-on-year in September.  Even so, the tightness of the job market is one of the key factors that the Bank of Canada will have to consider as it sets monetary policy in the months ahead.  With the NAFTA uncertainty out of the way, a 25 bp rate hike is likely at the end of this month, with a further increase probable early in 2019.