Canada’s unemployment rate fell to 5.2% in April, its lowest level since the data started being
tracked in 1976, as the economy failed to produce any new growth in the labor force.
The economy added 15,300 jobs in April, according to Statistics Canada, fewer than half the
40,000-gain forecast by economists. The small increase ended a surge that saw Canada create
410,000 jobs over the previous two months.
With employment already well above pre-pandemic levels, economists and policymakers have
been anticipating a slowdown in job creation as the nation struggles to find new workers, amid
elevated demand from employers.
The imbalance between demand and supply of jobs is a primary reason why the Bank of
Canada is tightening monetary policy. Canada’s economy has added almost 1 million jobs over
the past year, with employment nearly half a million above February 2020 levels.
Worries that Canada’s economy is up against capacity are stoking expectations the Bank of
Canada will aggressively hike interest rates in coming months, including a half-point increase at
its policy decision in June.
Canada’s central bank has already raised its trend setting rate by 0.75 percentage points since
March to 1%, and trading in overnight swaps suggests it will climb another two percentage
points by the end of this year.
Canada’s labor-force participation rate dipped to 65.3% in April. Adding to evidence of a
tightening market, involuntary part-time employment reached 15.7%, a record low.
Average hourly wages were up 3.3% in April from a year earlier, little changed from 3.4% in
March. For permanent employees, wages rose 3.4%. The nation lost 31,600 full-time jobs in
April, which was more than offset by a 47,100 increase in part-time employment.
Construction led declines, with employment in the sector down by 20,700 jobs. Service-related
industries posted a 31,400 gain for the month.
