OTTAWA (Reuters) – Canada’s unemployment rate fell to 5.3% in March, the lowest level on record, underscoring the tightening of the country’s labor market, Statistics Canada data showed on Friday, the economy creating 72,500 net jobs.
The job gain was slightly lower than analysts’ forecast of 80,000, while the jobless rate met expectations. Average hourly wages for permanent employees rose 3.7%, up from a 3.3% gain in February.
“We are beyond full employment. We see the market warming up and it shows with wage growth,” said Jimmy Jean, chief economist at Desjardins Group.
Job growth continues to outpace population growth, leading to tighter labor markets, Statscan said. Since September 2021, Canada has added 463,000 jobs, but only 236,000 new people of working age.
Employment gains were entirely in full-time work, partially offset by a slight decline in part-time work. Employment increased in both the services sector and the goods sector, led by accommodation and food services and construction.
Canada’s employment rate, a ratio that takes into account population growth and not just net job gains, reached its pre-pandemic level for the first time in March.
By comparison, the U.S. employment rate is still 1.1 percentage points lower than its February 2020 level, Statscan said.
Economists said jobs data continued to support the Bank of Canada raising its benchmark rate by half a point to 1% at its meeting next week.
“Today’s numbers may not be as spectacular as the previous month, but they are still strong enough to support calls for a 50 basis point hike,” said Andrew Grantham, senior economist at CIBC. Capital Markets.
A record number of Canadian businesses say intense labor shortages and ongoing supply chain issues are hampering their ability to expand capacity to meet soaring demand, according to a survey by the central bank this week.
The Canadian dollar stabilized at 1.2588 against the greenback, or 79.44 cents US after the jobs data, virtually unchanged on the day.
(Reporting by Julie Gordon in Ottawa; Additional reporting by Steve Scherer in Ottawa and Fergal Smith in Toronto; Editing by Andrea Ricci)