Statistics point out to historic lows in Canada’s unemployment rates. However, will wage growth ultimately lead to inflation?
Economists are being challenged with the task of adjectivizing Canada’s jobs report that was released today.
Economists Report on Canada Market
“Unbelievable”, “ridiculously strong” and “blowout report” were some of the superlatives that came in from TD, Scotiabank, and BMO, respectively. The question is what is causing excitement among economists? When unemployment is low and everything seems right and the jobs market is soaring high, the question is why do not we see inflation in wages?
In December, Canada had 78,600 new jobs to offer as per reports from Statistics Canada. Bearing in mind that 79,500 jobs were available for the taking in November; this is an amazing report. In 2017; Canada opened up to the unemployed with 422,000 jobs, which is a hike of 2.3% from the previous year. In 14 years; this is the greatest increase in jobs creation according to BMO.
According to Capital Economics; the headlines for the 2018 jobs reports is more impressive than the actual report which showed that 54,900 jobs opening In December were part time employment opportunities. However; the hard-nosed economics shop did go on to describe the report as positive. Additionally; jobs growth was dispersed all over Canada. Quebec and Alberta did make for the leading territories for new jobs creation in a wide range of industries.
The uptick in jobs creation led to a decrease in unemployment percentile; which came down as low as 5.7%; a record low in unemployment rates since 1974. The drop in unemployment rates can even be attributed to an Increase In participation rates; with 65.8 percentile of Canadians proactively searching for employment or steadily employed.