Statistics Canada's latest labour force survey revealed Friday the economy continued to add jobs in April while wage growth outpaced inflation
OTTAWA — The labour market is showing no signs of the slowdown the Bank of Canada is hoping for to get inflation down to two per cent, something economists say could force the central bank to get off the sidelines and raise rates again.Meanwhile, the unemployment rate held steady at 5.0 per cent for the fifth consecutive month. That’s just above the all-time low of 4.9 per cent reached last summer.
The Bank of Canada paused its interest rate hiking cycle earlier this year, encouraged by slowing inflation. With its key interest rate sitting at 4.5 per cent, higher borrowing costs should force people and businesses to pull back on spending, and employers to rethink their hiring plans. TD director of economics James Orlando said the details in the jobs report are "mixed." The economy continued to add jobs, but only part-time work. Moreover, population growth has been propping up employment numbers for months as Canada welcomes more immigrants.
The job gains in April were led by the wholesale and retail trade industry, while the largest losses occurred in business, building and other support services. High wage growth is pushing the Bank of Canada to remain hawkish in its communications on monetary policy, even as it holds its key interest rate steady.
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