The soft landing the Canadian labour market was trending towards to start the year got a bit bumpier in March. Employment was flat, even as population growth kept chugging, pushing the unemployment rate above 6% for the first time in over two years. Hours worked also ticked down, consistent with the weak reading.
The health of the labour market is divided, between those who already have jobs, and those who don’t. Layoff rates remained lower than historic norms in March. However, the number of new jobs started in the month was far below their seasonal average. As a result, fewer jobless workers were able to find new positions in the month, helping drive the rise in unemployment. It was also another rough month for youth employment.
Finally, wage growth remained strong, ticking up to 5.1% year-over-year, bucking the other signs of softening conditions and coming in well above the pace of inflation. One noticeable feature of the pay data has been that changes in the types of jobs people are working are providing a substantial boost to the headline average, over and above how pay within occupations is growing. However, given that headline LFS wage growth has been running at a stronger pace than other metrics, this suggests the strong readings should be taken with a grain of salt.
