Wednesday, May 29, 2024

Average hourly wage in Canada now $34.95: StatCan

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Canada’s economy added five times the number of jobs that were forecast for April and the unemployment rate unexpectedly held at 6.1 per cent, but wages grew at the slowest pace in 10 months, data showed on Friday.

The economy added a net 90,400 jobs while analysts polled by Reuters had forecast a gain of 18,000 jobs and the unemployment rate to rise to 6.2 per cent.

The gains – largest since the 110,000 jobs added in January 2023 – were a mix of part-time and full-time work, and entirely in the services-producing industries, data from Statistics Canada showed.

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The Canadian dollar strengthened 0.3 per cent to $1.3640 to the U.S. dollar, or 73.31 U.S. cents.

The average hourly wage growth for permanent employees slowed to an annual rate of 4.8 per cent from 5 per cent in March. The wage growth rate – closely tracked by the Bank of Canada (BoC) because of its effect on inflation – is now the slowest since the 3.9 per cent in June.

The slowdown in wages adds to signs that the economy is moving in line with the BoC’s projections, and could nudge the central bank toward lowering its policy rate from a 23-year of 5 per cent in June.

The bank is looking at a broad range of indicators for evidence that inflation is heading toward a 2 per cent target, and said last month that a rate cut in June was possible if a recent cooling trend in prices is sustained.

Money markets trimmed their bets on a June rate cut to 46 per cent from 54 per cent. They are now fully pricing in a cut in September compared to July before the report was released.

Friday’s jobs reports showed that employment in the services sector increased by a net 100,700 jobs, led by professional, scientific and technical services as well as accommodation and food services. The goods sector lost a net 10,400 jobs, mostly in construction and agriculture.

The employment rate, or the proportion of the population who are employed, also held steady at 61.4 per cent in April, after six consecutive months of declines, Statscan noted.

(Reporting by Ismail Shakil and David Ljunggren in Ottawa; Editing by Dale Smith and Philippa Fletcher)

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