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Canada’s labour market bounced back sharply in February, more than recouping the jobs that were lost when the Omicron variant of COVID-19 ripped through the economy.
The country added 337,000 jobs last month, following a decrease of 200,000 in January, Statistics Canada said Friday. The unemployment rate fell to 5.5 per cent from 6.5 per cent, taking it close to a record low set months before the pandemic began.
A hiring binge was expected in February, but nowhere near as much as what took place. The median estimate from Bay Street analysts was a gain of roughly 125,000 positions.
Inflation is surging in Canada and the United States – but wages are barely keeping up
The private sector drove the entirety of employment gains, which were largely for part-time positions, and with forceful snapbacks in hard-hit industries, such as hospitality and culture.
In the process, the labour market notched several milestones. Notably, the country’s employment rate – the proportion of the age-15-plus population who were employed – rose a full percentage point to 61.8 per cent, returning to its pre-pandemic level for the first time. The total number of hours worked in the economy jumped 3.6 per cent in February to a record high.
“The labour market looks like it’s at or very close to full employment. As a result, the Bank of Canada will be able to confidently hike rates again next month,” Royce Mendes, head of macro strategy at Desjardins Securities, said in a note to clients.
For many employers, the ongoing concern is the availability of workers.
As of December, there were around 900,000 job vacancies in Canada, near a recent high, according to the latest figures from Statscan. The number of job vacancies in health care and social assistance (137,100) hit a record that month, while employers were recruiting for more than 142,000 positions in hospitality, more than any other sector.
For workers, the concern is that wages are generally not keeping pace with inflation. In February, the average hourly wage increased 3.1 per cent over a year, a faster pace than in recent months. However, with annual inflation at 5.1 per cent – and set to increase further on higher gas prices – the average worker is experiencing a loss of purchasing power.
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