Sifting through the discouragingly strong job numbers for signs of upbeat weakness
Another Canadian jobs report has come out. Another set of employment numbers has defied expectations. Another month of rock-solid employment growth is in the books.Last Thursday’s labour force survey from Statistics Canada showed that employment rose by another 35,000 jobs in March, defying forecasters’ expectations that the labour market would at least take a breather after adding a ridiculous 172,000 jobs in the first two months of the year.
Growth of money supply – historically, a tell-tale indicator of the direction of both inflation and the overall economy – has slumped severely. The Bank of Canada’s M1++ measure – the go-to gauge of the amount of money in circulation and in Canadians’ bank accounts – has actually been shrinking on a year-over-year basis since last August.
But an extraordinarily tight labour market is a notorious inflationary pressure. The nagging concern is that the persistent strength in jobs will keep wage growth unusually high – tossing more fuel on the inflation fire even as the Bank of Canada and its high interest rates are tying to snuff out the blaze.
For instance, manufacturing jobs haven’t grown in the past year. Wholesale and retail hiring has similarly stalled. Year-over-year hourly wage growth remains high, at 5.3 per cent, but seems to have plateaued; average wages actually dipped a bit in March. Job vacancies, while still historically high, were down nearly 20 per cent in the fourth quarter from their peak.
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