March 2023 – Canada adds almost 35,000 new jobs

In March, Canada’s economy created 35,000 jobs, and the unemployment rate remained unchanged at 5%.

According to Statistics Canada, the main driver of the hike was the private sector. The gains were seen in the sectors of transportation and warehousing, business, support services, finance, real estate, rental and leasing.

At the same time, construction, other services and natural resources reported declines.

As employers kept showing strong hiring levels, wages also kept going up, with the average hourly wage rising by 5.3% on a year-over-year basis.

The report says the national labour market remained tight, despite the fact that high interest rates raised the cost of borrowing for people and businesses.

March became the fourth month in a row showing an unemployment rate of 5%, almost reaching the record low mark.

The report says unemployed Canadians were less likely to remain without a job for a long time in March. The share of those who were unemployed for 27 weeks or more by last month was 16%, which is lower than the 20.3% we saw a year ago.

Nevertheless, the labour market tightness will not last forever. The central bank’s aggressive rate increases since March 2022 are expected to affect the economy, with specialists predicting a significant slowdown in 2023.

The latest polls by the Bank of Canada showed that consumers and businesses are preparing for that slowdown. Consumers are planning to reduce their spending, and businesses are expecting slower sales.

Such a change will probably influence the labour market as well causing a hike in unemployment.

And although businesses kept naming labour shortages their top concern, the polls show certain signs of easing in the labour market.