Full-time Job Growth Fuels Lower Unemployment, Better Wages

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The Conference Board of Canada’s Economist Cory Renner offers the following insights on today's Labour Force Survey (LFS):

Canada’s labour market continues to be the bright spot of the Canadian economy. In September the economy generated 53,700 new jobs, all of which are full-time. As labour force growth was modest, the unemployment rate fell to 5.5 per cent. The best news was on the wage front, where low levels of unemployment pushed wages up 4.3 per cent compared to the same period last year.

Insights

  • Employment rose by 53,700 in September. Full-time employment increased by 70,000 while part-time employment fell by 16,300. On a year over year basis, the economy has now added a very impressive 456,000 new jobs.
  • Despite strong employment growth, the labour force expanded by only 6,800 new entrants in September. This resulted in the share of the population participating in the labour force falling slightly.
  • Strong job growth and a small increase in the labour force caused the unemployment rate to fall 0.2 percentage points to 5.5 per cent. This was the opposite of recent months, where job gains accompanied strong labour force growth allowing the unemployment rate to rise slightly.
  • Job growth was notably strong in Ontario (+41,000), Quebec (+13,600) and Alberta (+4,900). Job growth was weakest in British Columbia (-8,400) and New Brunswick (-1,500).
  • After weakening in August, wage growth improved again in September. In particular, year-over-year wage growth increased 4.3 per cent in September compared to a 3.7 per cent gain in August. With inflation running at just 1.9 per cent, households are seeing robust real increases in their pay. This should allow for solid spending increases into the Christmas season.
  • Wage growth was strong for both goods industries (+4.7 per cent year-over-over) and services industries (+4.2 per cent year-over-year).
  • Overall, low unemployment appears to be spurring better wage growth. Although labour market pressure appeared to be easing in recent months, markets tightened again in September. This is reflected strong real wage gains.

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Cory Renner

Economist

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