The recovery in employment is complete in Quebec. The unemployment rate has returned to its pre-pandemic level, and wages are increasing everywhere. The only downside: the specter of inflation.
The unemployment rate in Quebec stood at 4.5% in November 2021, the same rate as in February 2020, according to the latest data from Statistics Canada.
This favorable wind is accompanied by an increase in wages, underlines the renowned economist Pierre Fortin. “Overall, wages are increasing faster, precisely because there is a shortage of labor.” The federal body calculates that wages increased by an average of 7.5% between October 2019 and October 2021.
Women are seen as the big winners in this return to normalcy. The employment rate for women aged 25 to 54 reached an all-time high of 80.7%, according to Statistics Canada. “For 20 years, women’s wages have increased in purchasing power by 35%. For men, we are talking about 18%, ”notes Mr. Fortin. The omnipresence of teleworking should further promote gender equality in the labor market, adds the one who is also professor of economics at UQAM.
This successful economic recovery is largely explained by the money accumulated by Quebecers over the past two years. Consumption “has resumed at full speed for a year”, explains Pierre Fortin, thanks to “the savings accumulated due to voluntary or compulsory confinement and direct aid subsidies from governments during the recession”.
“What to hope is that the average salary increases, but not to the point of waking up the sleeping dog, which is inflation,” warns the experienced economist. “Otherwise, the Bank of Canada will raise interest rates to cool the economies, and there unemployment will rise. “
Shadow of inflation
If wages are increasing, prices have also been increasing very rapidly for a few weeks. However, according to Pierre Fortin, there is nothing to panic about. “Inflation fell below 1% in 2020, which partly explains why it rose above 3 or 4%, to compensate, in 2021. Overall, in Canada, if we bridge the gap by above the pandemic, we see that consumer prices increased by 5.3% from October 2019 to October 2021 in Canada, for an average increase of 2.6% per year for two years, that is to say quite in the 1% to 3% range targeted by the Bank of Canada. “
The gray eminence of the Quebec economy calls for caution, however. “The pandemic is not completely over, so we do not yet know all the changes that will follow. “
US Central Bank President Jerome Powell also warned his fellow citizens last week against hasty cries of victory, saying the Omicron variant posed “downside risks” and threatened the recovery. .
This text is taken from our newsletter “The Coronavirus Mail” of December 6, 2021. To subscribe, click here.