Canadian Employment (February 2023)

Canada's labour market continues to roll  

• The Canadian labour market added 22k positions in February, with full-time employment up 31.1k and part-time employment down 9.3k. 
• The unemployment rate held steady at 5.0%. The participation rate also held at 65.7%.
• By industry, employment was up in health care (+15k), public administration (+10k), and utilities (+7.5k). Losses were seen in business, building and other support services (-11k).
• Lastly, total hours worked were up 0.6% month-on-month and wage growth accelerated, up 5.4% year-on-year (vs 4.5% in January).             

Key Implications

• The jobs market in Canada continues to roll. The employment gain alongside higher wages and people working more hours points to a labour market that refuses to cool. Not to mention, all the job gains were in the private sector where cyclical strength is most apparent. All this means that Canadian incomes are seeing a boost, which will drive more consumer spending, presenting further upside to GDP growth for the first quarter. 
• For the Bank of Canada, the headline print might be more 'normal' compared to prior months, but it is still too high. Although the BoC has been effective at slowing the parts of the economy most sensitive to interest rates, and it has seen inflation decelerate confidently, a more decisive turn is needed. Given that the BoC is in wait-and-see mode with its conditional pause, it believes that it is only a matter of time before a slowdown shows up in the broader economy. But with today's labour market report, it will have to wait a little while longer.  

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