Commentaries Topics: Labour Force Survey

Much like the rest of Canada’s economy, the labour market is slowing down. Modest employment growth of 17,500 net new jobs in October, came in largely as expected, however this has failed to keep pace with the rapid population growth experienced over the course of the year. Hours worked have stagnated in recent months alongside disappointing GDP numbers.

The unemployment rate continues to slowly creep up, and now stands at 5.7% — certainly not a cause for alarm yet, but a clear signal that as labour demand/job vacancies decline and immigration adds to labour supply, the labour market continues to loosen up and rebalance. That said, market conditions are still tighter than usual, which is why wages (4.8% year-over-year) continue to run ahead of inflation (3.8%). All told, the recent string of weak data should keep the Bank of Canada on hold at its next meeting in December.

Stephen Tapp, Chief Economist, Canadian Chamber of Commerce

KEY TAKEAWAYS

• Employment grew modestly by 17,500 net jobs in October, largelyin line with market expectations (+25,000).
• Hours worked were largely unchanged on the month, consistentwithstagnating output.
• Average hourly wages remain strong andcontinue to grow faster than inflation, rising 4.8% year-over-year in October, slightly slower than a month earlier.
• Over the first 10 months of the year, employment growth (28,000 on average per month) has not kept pace with rapid population growth (85,000).
• The unemployment rate rose to 5.7% (a little worse than the market expected, 5.6%). As job vacancies decline and immigration adds to labour supply, the labour market continues to loosen up.
• By industry, gains in October occurred in construction (+23,000; +1.5%) and information, culture and recreation (+21,000; +2.5%). Employment fell in wholesale and retail trade (-22,000; -0.7%) and manufacturing (-19,000; -1.0%).
• Full-time work was stable (-3k), while part-time work was up slightly (21k). Employment in the public sector continues to grow (+19k), while private-sector employment is down over the past four months.
• Employment increased in four provinces in October (AB, SK, NS, NB). Alberta led the way (+38,000; +1.5%), while Quebec saw a decline (-22,000; -0.5%).

SUMMARY TABLES

Sources: Statistics Canada; Canadian Chamber of Commerce Business Data Lab

Sources: Statistics Canada; Canadian Chamber of Commerce Business Data Lab

LABOUR CHARTS

September’s jobs report blew past market expectations of 20K net gains. But the impressive headline number is concentrated in part-time work and in very few sectors. Labour force population also outpaced recent job gains, further bringing the tight labour market more into balance, and hopefully alleviating the strain on high wage growth. With hours worked essentially unchanged this month, there will be little impact on gross domestic product (GDP) in September, leaving the possibility of a contraction in the third quarter still on the table.

Andrew DiCapua, Senior Economist, Business Data Lab, Canadian Chamber of Commerce

KEY TAKEAWAYS

• The labour market maintained its robust momentum, at least for now. Employment grew by 64K jobs in September, following a substantial gain of 40k jobs in August. This was well above market expectations of 20K jobs.
• Total hours worked were essentially unchanged and rose by 2.6% year-over-year. Average hourly wages stayed elevated on an annual basis, rising 5% in September, but slowed on the month. Wage growth edged up in the third quarter, which will be of concern to the Bank of Canada.
• Labour force population has outpaced employment growth over the past few months, with an additional 72,000 individuals joining the workforce in September. The unemployment rate now holds steady at 5.5% for the third consecutive month. But, as vacancies decline and recent growth in immigration adds to labour supply, the labour market is moving closer to balance.
• By industry, gains were concentrated in the education sector (+66K; +4.5%) largely due to the start of the school year. Transportation and warehousing also saw considerable gains (+19K; +1.8%). Meanwhile, financial services (-20K; -1.4%) and construction (-18K; -1.1%) sectors witnessed job losses. Despite the headline growth number, seven sectors reported flat or negative growth on the month.
• In September, employment increased amongst both core-aged (25 to 54 years) men (+32K; +0.5%) and women (+37K; +0.6%). Part-time work grew 1.3%, overshadowing the modest employment gains in full-time work, which grew merely 0.1%.
• Regionally, provincial employment was led by Quebec (+39K; +0.9%), British Columbia (+26K; +0.9%), and Ontario (+20K; +0.3%). Alberta shed jobs in September, offsetting the gains of the previous two months (-38K; -1.5%).

SUMMARY TABLES

LABOUR CHARTS

August’s jobs report broke the steady cooling streak we’ve seen over the last three months. The data came in better than expected with the unemployment rate remaining unchanged from July at 5.5%, and with the economy adding 40,000 jobs. By now, we’re accustomed to the data not (completely) playing by the rules. 

All in all, the data reaffirmed a softening in the Canadian labour market. However, the unemployment rate remains well below pre-pandemic averages implying a tighter-than-normal labour market. This suggests that the economy has not completely returned to balance. We still need to see how these fluctuations, after unusual summer shocks like wildfires and strikes, will play out in the coming months. While there might be some relief in certain respects, it’s too early to celebrate, as we’re likely not far or safe from waving the white flag to a long-dreaded (soft) recession.

Marwa Abdou, Senior Research Director, Canadian Chamber of Commerce

KEY TAKEAWAYS

• Breaking a three-month cooling streak, unemployment rate remained flat in August at 5.5% y-o-y as Canadian employment was up by 40K net new jobs after unexpectedly shedding 6.4K jobs in July.
• Total hours worked rose 0.5% and remain up 2.6% y-o-y. Average hourly wages also rose 4.9% (still higher than 3.3% inflation rate), albeit at a slightly slower pace from July (5.0%).
• As job growth remains strong, the increase in labour force populations still outpaces recent job gains, signalling that larger employment numbers will be needed if we’re to keep the unemployment rate in line.
• By industry, we saw an uptick in jobs in professional, scientific, and technical services (+52k; +2.8%) as well as construction (+34K; +2.2%), meanwhile, as education services (-44k; -2.9%) and manufacturing (-30K; -1.6%) shed jobs.
• By gender, there were some notable gains. Employment in August also increased amongst both core-aged (25 to 54 years) men (+33K; 0.5%) and women (+21K; +0.3%). Female youth also saw an uptick in jobs (+32K; 2.4%) as employment declined for women who are 55 years and older (-27K; 1.3%).
• Regionally, provincial employment rose again in Alberta (+18K; +0.7%) and Prince Edward Island (+1.8K; +2.0%). We also saw gains in British Columbia (+12K; +0.4%) while Nova Scotia (-3.6K; 0.7%) shed employment. There was little change in remaining provinces.

SUMMARY TABLES

MORE LABOUR CHARTS

Sources: Statistics Canada; Canadian Chamber of Commerce Business Data Lab

With July’s labour force data, Canada’s unemployment rate has now been rising for the third consecutive month, reaching 5.5%. While the lackluster report was well below market expectations, with a net of -6.4K as compared to the expected +20-25K job gains, it holds steady the picture of a loosening job market. The most noteworthy component of the report is the rebound in average hourly wages, raising 5.0% year-over-year. As the only jobs report ahead of the next policy decision in early September, it is unlikely that this will be enough to raise concerns. This is especially true considering the anticipated boost in the pool of workers due to high levels of immigration. This influx, combined with slowing demand, may ease the pace of growth in the job market.

Marwa Abdou, Senior Research Director, Canadian Chamber of Commerce

KEY TAKEAWAYS

• The unemployment rate edged up slightly to 5.5% from June’s 5.4%. Canadian employment gains were little changed in July, falling by 6,000 jobs — below market expectations of a gain of 25k. This comes after 60k jobs added in the rebound from June’s uptick.
• While Canada’s population continues to grow, employment in July for part-time work and full-time held steady. Declines in employment, while broad based, were highest in construction (-45K, -2.8%). This was followed by public administration (-17K; -1.4%), information, culture, and recreation (-16K; -1.8%) as well as in transportation and warehousing (-14K; -1.3%). Overall, declines were offset by gains in health care and social assistance (+25K; +0.9%), educational services (+19K; +1.3%), finance, insurance, real estate, rental, and leasing (+15K; +1.1%) and agriculture (+12K; +4.6%).
• By gender, employment was amongst women saw little variation as we saw decline in jobs for core-aged men aged 25-54 years old (-27K, -0.4%) while jobs among male youth aged 15-24 saw a modest gain (+13K; +0.9%).
• While hours worked also remained unchanged, perhaps the most noteworthy component of the report came by way of average hourly wages. On a year-over-year (y-o-y) basis, average hourly wages rose 5.0% (+$1.59 to $33.24) in July, following increases of 4.2% in June and 5.1% in May (not seasonally adjusted). The pace of wage growth was the same for core-aged men and core-aged women albeit, wages grew at faster rate for full-time employees (+5.2% to $34.95) than for those working part-time (+4.7% to $23.50).
• Regionally, provincial employment rose in Alberta (+12K; +0.5%), New Brunswick (+4.2 K; +1.1%), and Prince Edward Island (+1.5K; +1.7%), while it decreased in Manitoba (-6.4K; -0.9%) and Saskatchewan (-5.7K; -1.0%) and was little changed in the other provinces).

SUMMARY TABLES

MORE LABOUR CHARTS

Canada’s labour market is turning a corner with June’s data. Coming in at the highest level in over a year, Canada’s unemployment rate edged up to 5.4%. We’re also seeing average hourly wages coming off the boil, with their slowest growth in over a year. 

However, the headline jobs number was strong, exceeding market expectations with a gain of 60K jobs (vs. 20K consensus), driven by full-time employment.

Overall, the market is showing signs of strength and resilience, although wage growth is moderating while still remaining high. While a softening labour market was the kind of good news that the Bank was likely hoping for, it remains to be seen if it will be enough to dissuade another hike.

Marwa Abdou, Senior Research Director, Canadian Chamber of Commerce.

KEY TAKEAWAYS

• Canada’s unemployment rate stands at 5.4%, a 0.2% increase from May, and the highest level in over a year. This represents a shift from the near-record lows of 4.9% recorded last summer.
• Market analysts anticipated a slight increase in job numbers (+20,000) and a marginal recovery in workforce participation. However, June’s data surpassed expectations, reporting a gain of 60,000 jobs (0.3% increase) compared to the lackluster report in May. Considering the unemployment rate, these indicators suggest a weakening labor market.
• June’s job gains came by way of upticks in the full-time employment (+110K; +0.7%) from May. The gains were concentrated in men; employment among women of all age groups remained relatively stable throughout June.
• Job gains were seen in wholesale and retail trade (+33K), manufacturing (+27K), health care and social assistance (+21K) and transportation and warehousing (+10K). However, it wasn’t all positive news for Canadian businesses as declines were seen in construction (-14K), education (-14K) and agriculture (-6K).
• Total hours worked remained virtually unchanged in June and were up 2.0% on a year-over-year basis. Conversely, average hourly wages slowed to 4.2% on a year-over-year basis in June, following an increase in May (5.1%). While it was the slowest wage growth since May 2022, this is still higher than inflation (3.4% in May). As the Bank of Canada enters a critical period in managing inflation, and ahead of next week’s policy rate announcement, this continues to be a critical indicator.
• Provincial employment increased in three provinces – Ontario (+56K), Nova Scotia (+3.6K), and Newfoundland and Labrador (+2.3K). Employment declined in Prince Edward Island (-2.4K). There was little variation in the other provinces.
• Overall, as the last major economic data release before next Wednesday’s interest rate decision by the Bank, this report provided some positive news as the market is slowly coming back into balance. While it won’t be the only factor weighing on the decision, it certainly won’t hurt in alleviating some of the Bank’s concerns in bringing down inflation to its target.

SUMMARY TABLES

CHARTS

We shouldn’t over-react to one month of data, but it’s now clear that momentum in Canada’s labour market has faded since January’s blockbuster hiring binge. Will today’s release mark a turning point, when the strong-and-long run for Canada’s labour market finally came to an end? Last month, there were cracks in the foundation when employment growth shifted from full-time to part-time jobs. This month, employment fell for the first time in eight months — albeit modestly, by only 17,000 jobs, and concentrated entirely in the youth segment. We’ll need a few more months of data to definitively call any turning point, but this release will have recession watchers on heightened alert over the summer months.

Stephen Tapp, Chief Economist, Canadian Chamber of Commerce

KEY TAKEAWAYS

• Canadian employment fell by 17,000 jobs in May, representing the first time in several months that employment was well below market expectations (+21,000.)
• Hours worked fell by 0.4%, which isn’t an encouraging signal for Canada’s GDP growth in the second quarter.
• The unemployment rate rose slightly to 5.2% — the first increase in nine months, although it remains near all-time lows.
• There was evidence of a slow start to the summer job season with weakness concentrated in younger workers (jobs for those aged 15-24 fell by 77k), while jobs for core-age workers continued to climb (+63k). Employment was little changed for older workers.
• By sector, job losses occurred in services (-40k, with business -31k and professional -13k). Employment rose in goods sectors, led by manufacturing (+13k).
• In what remains a tight labour market, average hourly wages grew by 5.1% year-over-year. Despite weak labour productivity, wages continue to outpace inflation (4.4% in April), as workers’ pay is now catching up for the big inflation spike.
• By province, employment in May fell in Ontario, Nova Scotia, and Newfoundland and Labrador, but increased in Manitoba. There was little change in other provinces.
• Hybrid and remote work patterns are settling into a new post-pandemic equilibrium. In May, almost one quarter of employees either worked exclusively at home (14.4%) or in a hybrid arrangement (10%).

SUMMARY TABLES

MORE LABOUR CHARTS

Canada’s labour market continued to outperform expectations in April with an increase of 41,000 jobs. However, the gains came exclusively from part-time employment, a sign that the full-time hiring binge may not be over. The labour market remains quite tight. The unemployment rate is 5%, near its generation low. Wages are growing at 5.2% year-over-year, at a healthy pace and running above the current inflation, something that will have the Bank of Canada watching closely.

KEY TAKEAWAYS

• Canadian employment rose by 41,000 jobs in April, once again exceeding market expectations (20,000), however all the growth came from part-time positions.
• Hours worked rose by 0.2%. The LFS reference week occurred prior to the federal public servant strike, so there is still some downside risk to GDP in April.
• The unemployment rate held steady at 5.0% for the fifth consecutive month, and remains near generational lows achieved last summer.
• Job gains were concentrated in part-time jobs (+48k, 1.3%), for the first noticeable gain since October. Full-time employment was essentially unchanged on the month.
• By sector, job gains were led by wholesale and retail trade (+24k) and transportation and warehousing (+17k). Employment was down in business services (-14k) and finance (-9k).
• In this tight labour market, average hourly wage growth remained strong at 5.2% year-over-year, and is now running faster than consumer price inflation (4.3% in March).
• Employment in April rose in Ontario (+33k; +0.4%) and Prince Edward Island (+2.2k; +2.5%), but declined in Manitoba (-4.k; -0.6%). There was little change in the other provinces.

SUMMARY TABLES

LABOUR CHARTS

Today’s data continue to underscore the resilience of Canada’s labour market at a time when many are waiting for a recession to hit. Canada’s economy added another 35,000 jobs in March, and 231,100 in the first quarter — an impressive number that tops even the most optimistic forecaster’s call. Hours worked remain strong, suggesting Canada’s GDP growth will post a solid bounce-back in the first quarter. Wage growth of 5.3% year-over-year finally jumped past the rate of inflation. The Bank of Canada is unlikely to deviate from their paused position next week. But at some point, if these dynamics continue, interest rates may need to go higher.

Stephen Tapp, Chief Economist, Canadian Chamber of Commerce

KEY TAKEAWAYS

• Canadian employment rose by a solid 34,700 jobs in March, continuing the trend of beating market expectations (7,500).
• Total hours worked increased 0.4%, and gained an impressive 5% annualized for the first quarter.
• The unemployment rate held steady at 5.0% for the fourth straight month, and remains near generational lows.
• Job gains were concentrated in the private sector (+35k), which is welcome news, and continues to close the gap with the public sector that drove employment growth earlier in the pandemic.
• By sector, job gains were led by services (76k): specifically transportation and warehousing (41k, recouping equivalent losses over the first two months of the year), business services (31k) and finance and insurance (19k). Employment was down in goods-producing sectors (-41k), falling in construction (-19k) and natural resources (-11k).
• In this tight labour market, average hourly wage growth remained strong at 5.3% year-over-year, and is now running slightly higher than CPI inflation (5.2%).
• Provincial employment increased in Ontario, Manitoba, Alberta and Prince Edward Island, but declined in Saskatchewan.
• As Canada’s workforce grows it is becoming more diverse. In March, racialized groups comprised 28.6% of the employed population in Canada. The largest racialized groups are South Asian, Chinese and Black Canadians, together representing 17% of employment.

SUMMARY TABLES

Amid high interest rates and slowing economic growth, February’s Labour Force Survey results shows there’s still plenty of steam left in the engine for Canada’s labour market. Following on last month’s blockbuster showing, this is another strong report – once again exceeding market expectations. We added another 22,000 jobs, and the unemployment rate held steady at 5.0%, close to its all-time low.

As we continue to monitor the economy for signs of cooling, hours worked keep rising, which suggests Canadian real GDP will get back into positive territory in 2023 Q1. Perhaps the biggest surprise is that average hourly wages rose 5.4% on year over year in February, up noticeably from 4.5% the month earlier. This number may cause the BoC to re-think its strategy of hold off on further rate hikes.

One thing is clear, the labour market remains exceptionally tight, keeping the keys firmly in the hands of job-seekers. It may be a while longer before the acute labour pressures that have plagued businesses begin to lift.

– Marwa Abdou, Senior Research Director, Canadian Chamber of Commerce

KEY TAKEAWAYS

• At 5.0%, Canada’s unemployment rate remains stubbornly tight and refuses to budge from near-record lows of 4.9% posted last summer. Though it was anticipated to edge up slightly (+10k), February’s figures posted an additional gain of +22K jobs.
• Continuing to be a strong driver of job growth were the employment numbers of workers aged 55 to 64 — +25K jobs (+0.7%) in February. This is the seventh month continuing a strong upward trend for this age group. Employment among youth and core-aged adults saw little change.
• Most of February’s job gains came from upticks in the fields of health care and social assistance (+15K; +0.6%), public administration (+10K; +0.9%), and utilities (+7.5K; +5.0%). The private sector also saw an impressive boost of 39K jobs (+0.3%), while public sector employment and self-employment saw little change. Conversely, jobs were lost in business services (-11K; -1.5%).
• Total hours also edged up an impressive 0.6% in February and are up 1.4% on a year-over-year basis.
• Average hourly wages rose 5.4% year-over-year — an uptick from January’s 4.5% after two months of deceleration. While this suggests households will have some spending power to navigate the rising living costs, the real risk is how this rebound will weigh on inflation—especially when labour productivity has been weak.
• Provincial employment increased in four provinces. After three consecutive months of lackluster growth, Manitoba posted a solid gain (+4.3K; 0.7%). Three of four Atlantic provinces saw modest rebounds after higher-than-average unemployment rates – New Brunswick (+5.1K; 1.3%), Newfoundland and Labrador (3.6K; 1.6%), Prince Edward Island (+1.7K; 2%). While there was little change in remaining provinces, Nova Scotia saw a decline (-4.7K; -0.9%).
• With its modest growth, February’s jobs report certainly brought more welcome news for job seekers. For the remainder of the economy, it leaves more room for doubt as to how much longer the market will continue to weigh on businesses as they continue to grapple with sustained recruitment and retention challenges amidst an extraordinarily difficult economic climate.
• As the gap between wage growth and inflation narrowed more this month, it remains to be seen whether this will be tip the Bank of Canada to lift its current hold on additional hikes as announced earlier this week.

SUMMARY TABLES

In stark contrast to recent high-tech layoffs, January’s blockbuster jobs report is proof that there’s still plenty of wind in the sails for Canada’s labour market. This was one of the strongest labour reports in a while, with 150K net new jobs added in January – double December’s figure and blowing past the market consensus of modest gains of 15k.

We also can’t ignore the broad-based gains for the fifth month – in both private as well as public sector – were accompanied by an impressive uptick in total hours (+0.8%). The big takeaway from this morning’s data is that calls for a recession in the Q1 2023 will have to wait.

KEY TAKEAWAYS

• January’s release reported job gains ten times bigger than market expectations (+15k) with 150K jobs (+0.8%) added to the economy. Broad-based gains were seen in full time (+121K) as well as private sector work (+115K).
• At 5.0%, Canada’s unemployment rate continues to hover near-record lows of 4.9%. Today’s epic report signals we’re not coming off the boil as quickly as expected, raising more questions about what comes next.
• Employment for the core working ages (25-54) was a key driver of this growth with an impressive uptick in gains of 0.8% (+100K). Employment rate among women was evenly split and is welcomed momentum for this subsector after December’s almost three-decade record high.
• Provincial employment increased in five provinces including Ontario (+63K), Quebec (+47K) and Alberta (+21K). Growth was also witnessed in several key industries including wholesale and retail trade (+59K), health care and social assistance (+40K); as well as educational services (+18K).
• Hours worked were especially notable after December’s lull as they edged up 0.8%. With a 5.6% year-over-year growth, this figure is an impressive rebound from a year prior when Canada was still in lockdowns with very high absenteeism.
• After months of persistent growth, the increase of 4.5% in average hourly wages slowed down from December’s figure (4.8%), although this partly reflects compositional changes based on comparing with January 2022, when there were fewer low-income jobs due to COVID restrictions. It’s clear that the full effect of BoC’s recent rate hikes hasn’t taken hold yet for the labour market. While trailing behind the latest inflation figures, it’s still well above the BoC’s target of 2%.
• All in all, January’s epic headline data comes after an equally impressive (and surprising!) labour numbers we saw south of the border last week. With January’s BoC’s rate pause, it leaves the door open to what lies ahead in a market that’s expected to be tough on businesses and consumers.

SUMMARY TABLES