Briefly noted, Canada's job market continued its remarkable run in March. According to Statistics Canada, the economy added 73,000 jobs in the month, with the increase more than fully accounted for by a rise of 93,000 in full-time employment. This pushed the unemployment rate down by two ticks to 5.3 percent, the lowest figure ever recorded for this series, which dates back to 1976. In contrast to the US, where employment remains below its pre-pandemic peak, the Canadian economy has been posting new all-time highs for employment ever since the pre-pandemic level was re-attained in September 2021.
Wage gains are accelerating, reaching 3.4 percent year-on-year in March after a gain of 3.1 percent in February. This remains well below the rise in CPI, which most recently stood at 5.7 percent. Still, there can be no doubt that the Bank of Canada is increasingly concerned by the evidence of unprecedented tightness in the labour market and the potential this brings for wage and cost pressures. Market expectations for a 50 basis point rate increase when the Bank's Governing Council meets on April 13 seem certain to be fulfilled.
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