Canada’s economy added 154,000 new jobs last month, surging past expectations and enough to move the jobless rate down to just six per cent.
Statistics Canada reported Friday that the jobless rate fell by 0.7 percentage points, to six per cent. That’s the lowest jobless rate since the pandemic began. Prior to COVID-19, in February 2020, Canada had a jobless rate of 5.7 per cent. It topped out at 13.7 per cent in May of that year, before sliding steadily lower.
The data agency calculates that more than 19.3 million people in Canada had a job last month. That’s 183,000 more than had one pre-pandemic.
The jobs surge means the total number of hours worked has finally also risen back to where it was before the pandemic.
Hours worked and wages up, too
There was good news on the wage front, too, as the data agency calculates that wages during the month were 7.7 per cent higher than they were two years ago.
The average hourly wage was $30.40 in November. That’s up by $2.18 since the same period two years ago.
While higher wages are good for workers, they come with a double-edged sword that the cost of living is going up quickly, too. Those bigger paycheques are tempered by the fact that Statistics Canada data shows prices have increased by 5.3 per cent compared to what they were two years ago.
Tanya Gullison, chief revenue officer with human resources consulting firm LHH, said people are heading back to the workforce in droves because they need the money to pay for the higher cost of everything.
“Inflationary pressure [is] bringing workers back into the labour force in search of increased income,” she said. “Employees are also navigating this with wage increases, mirroring those in south of the border.”
It’s paying off to change jobs, too, in the aggregate. Statistics Canada says average wage gains are increasing at a faster rate for new hires than they are for existing workers.
“Over the next fiscal year, bonuses and other perks are also likely to trickle over as a means of drawing new talent and retaining existing staff,” Gullison said.
War for talent
In the depths of the pandemic, policy makers had warned about a growing cohort of “long-term unemployed” people, which Statistics Canada defines as people who lost a job and didn’t find a new one for at least 27 weeks, which is just over half a year.
There were about 185,000 Canadians in that category before the pandemic, about 15 per cent of everyone without a job.
That number skyrocketed to 510,000 people by April of this year, or almost a third of those who were jobless.
The figure has inched steadily lower since then, but had its biggest drop since the pandemic started in November, plunging by 62,000 people to 305,000 people.
“Finally, these workers are seeing the light at the end of the COVID tunnel,” economist Tu Nguyen with consulting firm RSM Canada said. “With job vacancies surpassing 1 million, the labour shortage will intensify, pushing wages upward as businesses compete to attract and retain talent.”