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Tuesday, April 23, 2024

Canadian Economy Adds 41,000 Jobs in February, Unemployment Rate Reaches 5.8%

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The Canadian economy saw an increase of 41,000 jobs in February, driven primarily by gains in full-time employment across various industries, particularly in accommodation and food services. Despite this growth, the unemployment rate rose to 5.8%, reflecting ongoing challenges in the labor market. High interest rates have contributed to a slowdown in consumer spending, impacting business sales. However, strong population growth has partially offset these effects, sustaining job gains. While the employment rate has declined for a fifth consecutive month, wages in Canada continue to grow steadily, with average hourly wages up five percent from the previous year.

The Canadian economy experienced a notable uptick in job creation in February, adding 41,000 jobs, according to the latest labour force survey released by the federal agency on March, 9. This increase, primarily driven by gains in full-time employment, demonstrates continued growth in the labor market. However, despite this positive trend, the unemployment rate edged up to 5.8% last month.

Job gains were observed across several industries within the services-producing sector, with the most significant growth recorded in accommodation and food services. While these gains signify resilience in the job market, challenges persist as high interest rates dampen consumer spending, leading to a slowdown in business sales. Nevertheless, the Canadian economy has benefited from robust population growth, which has helped sustain job creation.

BMO chief economist Douglas Porter acknowledged the impressive rise in full-time jobs but cautioned that ongoing population gains have somewhat inflated these results. He noted that the labor market is gradually cooling despite the apparent strength in job numbers.

Statistics Canada’s emphasis on the employment rate in recent reports reflects concerns about whether job growth is keeping pace with population expansion. The report highlighted a concerning trend, with the employment rate declining for the fifth consecutive month in February, marking the longest period of consecutive decreases since April 2009.

Despite these challenges, wages in Canada continue to grow at a rapid pace. Average hourly wages were up five percent compared to the previous year, although this rate slightly declined from January’s figure of 5.3 percent. This steady wage growth suggests ongoing strength in the labor market, despite the nuanced challenges faced by both employers and employees alike.

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