Wage growth accelerated last month to its fastest clip in more than decade, according to numbers released Friday from Statistics Canada.
The 4.5 per cent burst came in a month that also produced less-positive data: the unemployment rate moved up to 5.7 per cent as Canada shed 24,200 jobs.
The increase in wages — as measured by year-over-year average hourly wage growth for all employees — marked the indicator’s strongest month since January 2009.
The reading, one of several wage measures closely watched by the Bank of Canada, was up from 3.8 per cent in June and 2.8 per cent in May. In Quebec, wage growth sped up to nearly 6.2 per cent, while Ontario’s number was 5.1 per cent.
In terms of job creation, the economy saw its weakest three-month stretch since early 2018. Until the spring pause, Canada had a been on a healthy run of monthly employment gains since last summer.
The survey found the numbers were nearly flat between May and July, a period that saw Canada add an average of 400 jobs per month. The agency cautions, however, that the recent monthly readings have been small enough that they’re within the margin of error and, therefore, statistically insignificant.
Even with the July decline, compared to a year earlier, the numbers show Canada added 353,000 new positions — almost all of which were full time — for an encouraging overall increase of 1.9 per cent.
The July unemployment rate remained near historic lows even after edging up to 5.7 per cent from 5.5 per cent in June. The rate was 5.4 per cent in May, which was its lowest mark since 1976.
Stephen Brown, senior Canada economist for Capital Economics, said the wage data released Friday — along with other recent wage indicators — suggest the measures are finally catching up to the tightened job market.
Brown predicts that even with solid wage numbers at home, the Bank of Canada will likely have to address something much bigger in the coming months: the weakening global economic environment.
“You’re now seeing this strong labour market in terms of the wage numbers, but we know conditions elsewhere in the world are deteriorating — so it’s certainly something interesting for the policy-makers to think about,” he said in an interview.
Capital Economics, Brown added, is among a minority of forecasting shops that predicts the Bank of Canada will cut interest rates in October to respond to fallout from an escalation in ongoing trade wars and weakening demand from the United States.
TD senior economist Brian DePratto wrote in a report Friday to clients that “the Bank of Canada remains caught between two opposing trends: relatively healthy domestic conditions, and a worsening external backdrop.”
He added that unless we see a marked shift in either of these, the central bank will “likely remain happy to sit on the sidelines.”
A closer look at July’s jobs numbers shows the economy lost 69,300 private-sector employee positions last month, while the public sector gained 17,500 jobs.
Alberta, Nova Scotia and New Brunswick posted notable declines in employment last month — and jobless rates moved higher in each of the provinces.
Quebec and Prince Edward Island added jobs last month, the report said.
Youth employment fell by about 19,000 positions, pushing the jobless rate up 0.7 percentage points to 11.4 per cent.
The number of positions for core-aged women — between 25 and 54 years old — dropped by about 18,000.
Andy Blatchford, The Canadian Press