Canada’s economy added 39,800 jobs last month, as a surge in hiring for full-time work pushed the jobless rate down to its lowest rate on record, 5.1 per cent.
Statistics Canada reported Friday that more than 135,000 people found full-time work during the month. That more than offset a decline of 96,000 part-time positions.
The jobless rate inched down for the third month in a row, settling at the lowest point it’s been since comparable record-keeping began in 1976.
May’s hiring surge adds to the expansion that Canada’s economy has seen in recent months. After shedding more than three million jobs in the early days of the COVID-19 pandemic, Canada’s job market has slowly and steadily recovered.
Booming demand for workers
By November 2021, Canada finally had the same number of workers it had before the pandemic. When May’s numbers are included, it now has half a million more than it did then.
The balance between job vacancies and workers has almost completely shifted from one of imbalance to one where employers can’t find enough people to work.
“As we commence the ritual of filling patios and hit the road for overdue vacations, employers continue to search for workers to meet heighten demand,” TD Bank economist James Orlando said of the numbers. “This has job vacancy rates at record levels, making it clear that the Canadian economy is operating beyond full employment.”
Statscan says the ratio of unemployed people to job vacancies has reached an all-time low of 1.2.
That demand for workers is pushing wages up, too. The data agency says average hourly wages have risen by $1.18 in the past year, to $31.12 an hour. That’s an increase of 3.9 per cent. While an impressive clip by historic standards, it’s still well short of the country’s official inflation rate of 6.8 per cent.
Workers have unprecedented leverage at the moment, and many of them are seeking out higher paying positions — and getting them.
Ellen Yifan Chen was a lawyer at a major firm in Montreal who recently made the leap to a new job as general counsel at a technology company based in Quebec City.
She was compelled to switch by the same factors that drive many people, including flexibility, new challenges, and the ability to work from home. But ultimately, the dollars and cents were a major difference maker.
“I did succeed in having an increase to my salary as well as a signing bonus,” Chen said in an interview. “I would say that it was a big motivating factor for me to finally take the jump.
As a lawyer at a major firm, Chen said she was told for years to expect her compensation to take a dip should she decide to go somewhere else, but she says she’s noticed a sea change in her industry of late.
“Since the last six months, I have been hearing offers right out of the gate from recruiters that are either matching or higher than my salary that I was making before,” she said.
“Lots of my friends are also changing jobs. I looked at LinkedIn almost every day, and somebody [was] switching jobs.”
Higher wages and plentiful job options is great news for workers, but it’s less so for central bankers tasked with reining in runaway inflation.
“It is an unwelcome sign for the Bank of Canada as higher wages push up consumer demand and thus inflation,” said Jay Zhao-Murray, an analyst at foreign exchange firm Monex.
“A tight labour market where workers have more bargaining power points to yet higher wage growth down the line. Without some slowing in wage growth, central bankers will continue to worry that the hot labour market is making their job of bringing inflation back down even harder.”