May 2023 LFS: Canada’s labour market is still defying expectations, but gearing down to part-time work

Canada’s labour market continued to outperform expectations in April with an increase of 41,000 jobs. However, the gains came exclusively from part-time employment, a sign that the full-time hiring binge may not be over. The labour market remains quite tight. The unemployment rate is 5%, near its generation low. Wages are growing at 5.2% year-over-year, at a healthy pace and running above the current inflation, something that will have the Bank of Canada watching closely.

KEY TAKEAWAYS

• Canadian employment rose by 41,000 jobs in April, once again exceeding market expectations (20,000), however all the growth came from part-time positions.
• Hours worked rose by 0.2%. The LFS reference week occurred prior to the federal public servant strike, so there is still some downside risk to GDP in April.
• The unemployment rate held steady at 5.0% for the fifth consecutive month, and remains near generational lows achieved last summer.
• Job gains were concentrated in part-time jobs (+48k, 1.3%), for the first noticeable gain since October. Full-time employment was essentially unchanged on the month.
• By sector, job gains were led by wholesale and retail trade (+24k) and transportation and warehousing (+17k). Employment was down in business services (-14k) and finance (-9k).
• In this tight labour market, average hourly wage growth remained strong at 5.2% year-over-year, and is now running faster than consumer price inflation (4.3% in March).
• Employment in April rose in Ontario (+33k; +0.4%) and Prince Edward Island (+2.2k; +2.5%), but declined in Manitoba (-4.k; -0.6%). There was little change in the other provinces.

SUMMARY TABLES

LABOUR CHARTS