Labour Market Trends

EMPLOYMENT UP 90,400 IN APRIL

Employment rose 90,400 (+0.4%) in April, the biggest monthly advance since January 2023. The underlying details of the report were also relatively solid, showing increases in full-time jobs, private sector employment, and total hours worked.

The surprising jump in employment in April was well above consensus expectations. This complicates the Bank of Canada’s decision on when to start lowering interest rates, although they will be reassured by the slowing pace of wage increases. All told, financial markets have reduced their expectations for a rate cut in June, now largely viewing it as a toss-up.

MANUFACTURERS ADD WORKERS FOR SECOND STRAIGHT MONTH

Manufacturing employment increased by 3,400 in April, following a gain of 9,300 jobs in March. However, despite these consecutive advances, employment is still down by 7,400 since the beginning of the year. Manufacturers continue to confront multiple challenges, including persistent workforce issues, high interest rates, and soft global demand. These factors are limiting their need and ability to hire new workers.

Elsewhere, employment was up in 9 of the remaining 15 major industries, led by professional, scientific and technical services (+25,500), accommodation and food services (+24,200), and health care and social assistance (+17,400). These gains were partly offset by a pullback in construction (-11,100).

UNEMPLOYMENT RATE STABLE AT 6.1%

The unemployment rate remained steady at 6.1% in April, with the labour force growing in tandem with the increase in employment. Meanwhile, the jobless rate in manufacturing fell from 4.1% in March to 3.9% in April.

WAGE GROWTH SLOWS

Despite the robust job growth, average hourly wages slowed to a 4.7% annual pace in April from 5.1% in March. Year-over-year wage growth in the manufacturing sector also decelerated last month, slowing from 4.3% in March to 3.7% in April, the slowest reading since July 2022. The average factory worker earned $34.21 an hour in April 2024 compared to $32.98 an hour in the same month a year ago.

ONTARIO AND ALBERTA DRIVE EMPLOYMENT GAINS IN MANUFACTURING

Regionally, employment increased in 9 of 10 provinces in April. The biggest absolute gains were recorded in Ontario (+25,000), BC (+23,400), and Quebec (+19,200), while the largest proportional increase was observed in New Brunswick (+7,800). This was Quebec’s first significant gain in employment since September 2023. Nova Scotia was the only province to lose jobs last month, with a modest decline of just 900 positions.

In the manufacturing sector, employment was up in six provinces in April, led by Ontario (+5,100) and Alberta (+1,300). In proportional terms, Nova Scotia (+700) and New Brunswick (+500) also experienced solid gains in factory payrolls last month. On the downside, these increases were partially offset by a significant pullback in BC (-5,600). Taking a longer-term view, Ontario’s manufacturers (+23,900) have created the most jobs over the last year, while Quebec’s manufacturers (-22,600) have shed the most workers.