E Canada's Wage Growth In July

“(Canada’s) tight labour market is reflected in wages with hourly earnings of permanent workers rising 0.7% m/m in July (seasonally adjusted by NBF), following similar prints in the two prior months. As a result, wage inflation accelerated to 4.5% on an annual basis in July, the fastest clip since 2008. This development is consistent with the sharp increase in labour turnover currently taking place” (National Bank, August 9, 2019)

In Canada total employment was little changed for the third consecutive month as of July, though the unemployment rate increased by 0.2 percentage points to 5.7% as more Canadians entered the labour force. 

Nonetheless, 24,000 jobs were lost in July, roughly evenly split between full time and part time losses. 

In terms of the industrial picture of employment in July, construction led the way by creating 25,000 jobs, though the service sector shed an almost equal number of jobs in July. 

In a nutshell, there has been a flattening out of total employment over the past three months.

However, Canada’s monthly labour force statistics are widely known to be quite erratic. A more accurate picture emerges by reviewing longer-run data. 

On that basis, Canadian employment increased by 353,000 (or +1.9%) over the past twelve months, and the increase was primarily driven by gains in full-time work (+326,000 or +2.2%). 

Over the same twelve months, hours worked also increased by 0.7%.


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