Economic commertary provided by Alberta Central Chief Economist Charles St-Arnaud. This report includes regional details for Alberta.

Bottom line

The strong 90.4k employment gain in April suggests that the weakness seen in March was possibly an aberration. When averaging the change in employment over March April, it indicates that job creation at 45k per month was slightly stronger than its pre-March trend. However, the unemployment rate did not improve, as labour force growth remained strong, suggesting that the labour market did not tighten.

The report also showed that wage growth for permanent workers eased 4.8% y-o-y, still higher than justified by productivity growth and catch-up in purchasing power. We estimate that the 3-month annualized change of the seasonally-adjusted series was 3.4%, suggesting further deceleration in the coming months. Moreover, a wide range of wage measures eased in April, indicating that the accumulated slack in the labour market could be holding back wage growth.

The Bank of Canada will welcome signs of slower wage growth, even though it continues to grow at levels disconnected from productivity gains. Moreover, there are increasing signs that the slack built up in the labour market over the past year is helping to ease some of the wage pressures.

We think the rebound in the employment report for April is unlikely to sway BoC into a pause. The BoC remains focused mostly on inflation. The breadth of inflation is gradually easing and returning to its historical average, while core inflation is returning below 3% and its momentum is also below 3%. With this in mind, we continue to believe the BoC will cut at the June meeting, unless we get a positive surprise when inflation for April is released on May 24th.

As we have mentioned on numerous occasions, whether the country experiences a soft or hard landing, depends heavily on the health of the evolution of the labour market i.e. whether we see a hiring freeze or broad-based layoffs as the economic activity slows further (see Will it be a hard landing or a soft landing? The labour market will decide). So far, there are no signs of a significant deterioration in the labour market.

Alberta saw an increase in employment in April of 10.6k. Despite the job gains, the unemployment rate rose to 7.0%, its highest level since November 2021. However, the rise in the unemployment rate is mainly due to strong population growth, as the employment rate remained unchanged.

Over the past year, the province has created 92k jobs, almost a quarter of Canada’s gain. However, the unemployment rate in Alberta remains higher than the national measure, partly due to the strong population growth. Moreover, wage growth in Alberta (+3.9% y-o-y) continued underperforming against the rest of the country (see Where’s the boom? And the rise and fall of the Alberta Advantage for some explanations).

Employment jumped higher by 90.4k in April, much stronger than expectations. Despite the strong rise in employment, the unemployment rate at 6.1%, as labour force continued to increase strongly. The employment rate, the share of the population holding a job, was also unchanged at  61.4%, as the population grew at roughly the same pace as employment.

Wage growth for permanent workers eased to 4.8% from 5.0% y-o-y, yet still elevated. The 3-month annualized change in seasonally-adjusted wages accelerated to 3.4%, but continues to suggest further deceleration in wage growth. Moreover, wage growth across a broad spectrum of measures is also lower, but remains elevated.

The details show gains in both full-time jobs (+40.1k) and part-time jobs (+50.3k) in April. Moreover, the higher employment was mostly in the private sector (+50.4k), with robust gains in the public sector (+25.5k) and self-employed (+14.5k).

On an industrial level, the employment gains were all in the service sector (+100.7k), while jobs in the goods-producing sector saw a loss (-10.4k).

The details in the good-producing sector show that the job losses were broad-based, led by construction (-11.1k), agriculture (-5.4k), and utilities (-5.0k). These declines were partly offset by gains in natural resources (+7.7k) and manufacturing (+3.4k).

The gains in the service industries were led by professional, scientific and technical (+25.5kk) and accommodation and food services (+24.2k), both reversing the losses seen the prior month. There were also solid gains in health care (+17.4k), information, culture and recreation (+9.9k), transport and warehousing (+6.7k), other services (+6.5k), and trade (+6.1k). These gains were partly offset by a loss in education (-4.5k).

At a provincial level, all provinces saw an increase in employment, except Nova Scotia (-0.9k, -0.2% m-o-m). The biggest job gains were in Ontario (+25.0k), +0.3% m-o-m), BC (+23.4k, +0.8% m-o-m), Quebec (+19.2k, +0.4% m-o-m), and Alberta (+10.6k, +0.4% m-o-m).

Despite broad gains in employment, the unemployment rate was mixed at the province level. The unemployment rate rose in Alberta (+0.7pp), Saskatchewan (+0.3pp), Manitoba (+0.1pp), Ontario (+0.1pp), and Quebec (+0.1pp). It declined in Newfoundland (-1.0pp), New Brunswick (-0.8pp), PEI (-0.6pp), and BC (-0.5pp).

The unemployment rate is the highest in Newfoundland (+9.1%), New Brunswick (+7.0%), Alberta (+7.0%), PEI (6.8%), and Ontario (6.8%). It is the lowest in BC (5.0%), Manitoba (5.1%), Quebec (5.1%), and Saskatchewan (5.7%).

Wages for permanent workers increased the most in Nova Scotia (+7.7% y-o-y), BC (+6.9% y-o-y), PEI (+6.5% y-o-y), Manitoba (+6.5 y-o-y), and New Brunswick (+5.6% y-o-y).

It rose at the slowest pace in Saskatchewan (+3.4% y-o-y), Alberta (3.9% y-o-y), Newfoundland (+4.0% y-o-y), and Ontario (4.3% y-o-y).

In Alberta, employment rose 10.6k in April. The unemployment rate rose to 7.0% from 6.3%, mainly due to a jump higher in the participation rate to 70.1% from 69.5%. This is the highest unemployment rate since November 2021. The employment rate, the share of the population holding a job, was unchanged at 65.2%. Wage growth for permanent workers eased to 3.9% y-o-y, underperforming the rest of the country.

The job gains in Alberta were mainly self-employed (6.7k) and in the private sector (+6.1k), while the public sector had some losses (-2.2kk). The higher employment was in both the goods-producing sector (+5.8k) and the service sector (+4.9k).

The increase in the goods-producing industry was mainly in natural resources (+6.4k) and manufacturing (+1.3k), while there were losses in agriculture (-2.1k).

The higher employment in the service sector mainly came from professional, technical and scientific (+4.7k), other services (+4.4k), and information, culture and recreation (+2.5k). These losses were partly offset by lower employment trade (-4.6k) and health care (-3.9k).

On a regional basis[1], the data is published on a three-month average basis (see table below). Over the past three months, the province gained 12.0k jobs each month on average. The increases were mainly in Edmonton (+9.3k), Lethbridge-Medicine Hat (+2.8k), and Calgary (+2.4k), while it declined in Wood Buffalo-Cold Lake (-1.2k) and Camrose-Drumheller (-0.2k).

The unemployment rate for the province rose to 6.9% on average over the past three months. The biggest increases were in Calgary (+0.9pp), Wood Buffalo-Cold Lake (+0.3pp), and Western Alberta (+0.2pp), while it declined the most in Lethbridge-Medicine Hat (-1.4pp), Camrose-Drumheller (-0.6pp), and Red Deer (-0.4pp). The unemployment rate is the highest in Calgary (+7.9%), Edmonton (+6.8%), and Red Deer (+6.6%). It is the lowest in Camrose-Drumheller (4.4%), Western Alberta (+5.3%), and Wood Buffalo-Cold Lake (5.8%).

The employment rate for Alberta was unchanged at 65.3%. The employment rate improved mostly in Lethbridge-Medicine Hat (+0.7pp), Edmonton (+0.4pp), and Western Alberta (+0.2pp), while it eased the most in Wood Buffalo-Cold Lake (-1.2pp).

[1] All the numbers are expressed as three-month average of the non-seasonally adjusted number.


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Independent Opinion

The views and opinions expressed in this publication are solely and independently those of the author and do not necessarily reflect the views and opinions of any organization or person in any way affiliated with the author including, without limitation, any current or past employers of the author. While reasonable effort was taken to ensure the information and analysis in this publication is accurate, it has been prepared solely for general informational purposes. There are no warranties or representations being provided with respect to the accuracy and completeness of the content in this publication. Nothing in this publication should be construed as providing professional advice on the matters discussed. The author does not assume any liability arising from any form of reliance on this publication.