Canada’s unemployment rate rose to 5.8 percent in February, despite an additional 40,700 jobs being added to the labour market, Statistics Canada data show.
February’s increase in jobs was attributed to a rise in full-time work, much higher than the 20,000-job increase economists predicted, StatCan said.
Job gains were spread across a number of industries in the services-producing sector, with accommodation and food services recording the strongest employment growth.
The rise in jobs last month follows January’s 37,300 uptick in jobs due to an increase in part-time work. Meanwhile, Canada’s unemployment rate was 0.1 percent lower last month at 5.7 percent.
The rise in unemployment comes the same week the Bank of Canada announced it would hold its benchmark interest rate at 5 percent for the fifth consecutive time.
Bank of Canada Governor Tiff Macklem said it was “still too early to consider lowering” rates during a press conference on March 6.
The central bank governor said Canada’s labour market is “coming into better balance” as job vacancies return to “more normal levels,” adding that the bank would be on the lookout for additional evidence that wage growth is easing.
Currently, wages are on an upswing in Canada. Statistics Canada noted the average hourly wage rose 5 percent from a year ago, following an increase of 5.3 percent in January.
Moderation of wage growth is on the way, however, Bank of Montreal chief economist Douglas Porter predicted.
While the “towering rise” in full-time jobs is “impressive at first blush,” he said the results are due to an ongoing population increase.
James Orlando, TD director and senior economist, agreed, saying the central bank won’t be swayed from its current stance by the latest labour market report.
“While the job market has held in OK in spite of Canada’s meagre pace of growth over the last year, the path of inflation is the deciding factor,” he wrote in a note on March 8. “And to date, the central bank believes it hasn’t seen enough evidence to move off the sidelines, although the slight easing in wage pressures may help.”
Employment Increases Among Women
Employment rose among “core-aged” women between the ages of 25–54, according to the StatCan report, the first increase since September 2023.The employment rate for core-aged women grew by 0.3 percentage points, to 81.4 percent, last month and held steady at 87.2 percent for core-aged men.
Employment rates remained virtually unchanged for those aged 15 to 24. On a year-over-year basis, the employment rate was down by 4.6 percentage points among young women and by 2.3 percentage points among young men.
Rates of employment declined for women aged 55 and older, falling 0.4 percentage points to 30.1 percent. Employment rates fell 0.2 percentage points to 40.2 percent among older men.
