Small return to a certain calm in February on a job market that remained tight. Two days after the decision to keep its key rate unchanged, the Bank of Canada is receiving a half fig half grape signal that should all the same confirm its decision.
On Wednesday, by announcing that the target for the overnight rate would be maintained at 4.5%, the Bank of Canada returned to one of its main concerns regarding inflation. “The labor market remains very tight and wages continue to rise at a rate of 4 to 5%, while productivity has fallen in recent quarters,” she lamented. Earlier, she asserted that “unless productivity growth becomes surprisingly strong, it will not be possible to meet the 2% inflation target if wage growth remains within this range”.
According to Statistics Canada data released on Friday, employment remained stable in February and the unemployment rate was unchanged at 5%. In fact, there was a net creation of 22,000 jobs, up 0.1% from a fairly active month of January in this regard, with a net gain of some 150,000 jobs. Total hours worked rose 0.6% in February, up 1.4% year on year. The employment rate—the percentage of people aged 15 and over who are employed—was 62.4%. We are talking about a small drop of 0.1 percentage point from the peak of 62.5% reached in January. The latter was the highest since May 2019.
In short, the next statistics will indicate if the January data is equivalent to reaching a peak.
Side remuneration, the central bank does not have to rejoice. The nation’s average hourly wage rose 5.4% in February from a year earlier (+$1.69) to $33.16. “This growth was higher than that recorded in January (+4.5%) and December (+4.8%), but lower than that posted in November (+5.8%)”, retains Statistics Canada. In Quebec, the annual increase in hourly wages remains stronger, at 6.5%, compared to 6.9% the previous month.
The central bank, however, said on Wednesday that it was banking on the weak growth expected in the coming quarters, which “should moderate wage growth and also increase competitive pressures, making it more difficult for companies to pass on their cost increases to consumer prices. “.
Retreat postponed
In the process, a measurement stands out from the Statistics Canada survey. Compared with a year earlier, employment gains among people aged 55 to 64 were widespread in February. They included notable increases in manufacturing (+38,000; +10.1%), in professional, scientific and technical services (+26,000; +10.1%), in “other services” (+14 000; +11.3%) and in agriculture (+11,000; +28.1%).
Phenomenon linked to the rise in the cost of living? Difficult to conclude. Still, the proportion of people in this age stratum who listed retirement as their main activity was down 0.7 percentage points, to 18%, in the 12 months to February. Among those aged 60 to 64, 26.5% listed retirement as their main activity, compared to 27.7% a year earlier.
Big year 2022 in Quebec
Meanwhile, Quebec posted a decline of 15,500 jobs last month after a strong surge of 47,000 in January. Full-time employment fell 30,400, erasing the 14,900 gain in part-time jobs. The unemployment rate stands at 4.1%, up 0.2 percentage points) from its record rate of 3.9% recorded in January.
This reading follows a rather solid year 2022 for employment in Quebec. The report from the Institut de la statistique du Québec (ISQ) tells us that the number of jobs increased last year by 129,700, or 3% compared to 2021. This strong surge echoes the job vacancies rose 25% to 241,700 to reach a high since 2015. Employment numbers rose in almost every province, but Ontario (+338,300; +4.6 %) and Quebec, which are showing the strongest growth.
Between 2021 and 2022, it increased by approximately 114,000 (+4.1%) in the private sector, and by 21,000 (+2.1%) in the public sector, in contrast to the decade 2012- 2022, during which employment increased more in the public sector (+24%) than in the private sector (+10%).
Average hourly earnings increased by $1.69 (+5.8%) between 2021 and 2022, to settle at $30.96. In comparison, the consumer price index grew by 6.7%, retains the ISQ.
A calm in sight
A lull is expected this year. In its December economic update, the Quebec government predicts an increase of 31,100 jobs in 2023, under the influence of the marked slowdown in economic activity. After settling, on average, around 4.5% last year to reach a historic annual low, the unemployment rate projected by the Ministry of Finance is 5%, on average, in 2023. Tensions in the The labor market should result in a 10.6% increase in wages and salaries in 2022 and 3.5% this year, after a significant increase of 10.8% in 2021, it adds.