Canada's job market continues to surpass expectations. Statistics Canada reported this morning that the economy added 34,700 jobs in March, comfortably exceeding the consensus expectation for an increase of 12,000. The unemployment rate remained at 5.0 percent for a fourth consecutive month.
In keeping with the recent pattern, most of the jobs created in the month were in the private sector, with 35,000 new positions, while public sector and self-employment were little changed. Almost 19,000 of the new jobs were full-time in nature. Ontario and Alberta led the increase, with Saskatchewan the only Province recording lower employment.
One aspect of the report that will attract particular attention from the Bank of Canada is the growth in wages. Although the year-on-year gain in hourly earnings eased to 5.3 percent in March from February's 5.4 percent, this marked the second consecutive month that it has been marginally above the latest reported rise in CPI, namely the 5.2 percent gain reported for February. March CPI data, due on April 18, are likely to show a further decline in headline inflation, widening the gap between earnings and prices. This is hardly evidence of the much-feared wage-price spiral*, but with the labour market remaining so tight, it will certainly influence the Bank's thinking regarding its "conditional" pause in tightening.
Good Friday brings the release of the corresponding data for the US. the non-farm payrolls data for March. Reports of mass layoffs in the tech sector and elsewhere have fed expectations that this may turn out to be the month in which the US employment picture finally turns sour, paving the way for the Fed to initiate a pause of its own. Stay tuned!
* Well, unless you count this guy.
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