March’s labor report had four fantastic ingredients: low unemployment (5.0%), high labor force participation rate for women (82.0%), continued strong wage gains (+5.3%), and a booming service industry (+75k).
Overall, the Canadian labor market added 35,000 new jobs, a 0.2% increase from last month’s gains.
Low unemployment and strong worker participation
For the fourth month in a row, the unemployment rate has been stuck at 5.0%. This is just a hair above the record low of 4.9% last June and July. Younger Canadian workers (15-24), especially, had a solid month: male youth unemployment fell 0.8%, and for women youth, it fell 0.6% as well.
One of the brightest spots of the Canadian labor market has been the rebound in core-aged (25-54) women’s labor force participation rate. Year-over-year, an additional 172,000 women have entered the labor market! For core-aged male workers, the pace of job gains has been more subdued, but still impressive, adding 82,000 new workers year-over-year.
Robust wage growth
Year-over-year, wage growth climbed 5.3% in March. This was slightly cooler than the previous month’s 5.4% increase. Overall, wage gains have been considerably above their pre-COVID baseline of around 2.5%.
Goods vs. services employment
The service industry in Canada is booming. Last month, it added 75,500 new jobs, a 0.5% increase from the month before. On the other hand, goods-producing industries are experiencing a significant slowdown, losing 40,900 jobs – a whole percentage point decrease from February.
Two particular industries underscore the shifts in goods- and service-producing industries: transportation and warehousing and construction.
For the transportation and warehousing sector, March’s rebound of 41,000 new jobs showed a renewed strength in the industry. This has completely offset the 41,000 losses from February 2022 to January 2023. While their U.S. counterparts suffer significant job losses, transportation employers in Canada are seeing strong growth.
However, the construction industry lost a concerning 18,800 jobs, a 1.2% decrease from last month. An Ipsos poll was published this week with a frightening headline: “Six in Ten Canadians Who Don’t Own a Home Continue to Feel Owning a Home is Completely Out of Reach.”
Current homeowners do not want to sell because of high-interest rates, and people looking to buy a home don’t want the higher purchasing costs of interest rates. Slower activity in the housing market is bleeding through, into construction overall and reducing hiring needs.
What does this mean for recruiters?
Andrew Flowers, the Director of Research at Recruitonomics published a fantastic article this week about why he doesn’t believe there will be a recession in the U.S. this year. The last three labor market releases demonstrate the same strength for the Canadian labor market.
Strong wage gains, robust employment growth, and low unemployment all indicate a recipe for success for the remainder of 2023. Concerns about a looming recession continue to be pushed further into the future.
