The Canadian economy might seem booming — but not for everyone. Statistics Canada (Stat Can) payroll data shows elevated job vacancies in February. Wages increased, as one would expect with such high job vacancies. They just failed to keep up with the kind of growth expected in a high inflation environment. Average wages grew by less than half the inflation rate, meaning a loss in real earnings.
Canadian Employees On Payroll Fell, But Increased Seasonally
Stat Can unadjusted employees on payroll made a sharp decline for the month. Unadjusted employees reached 15.9 million in February, down 3.45% (570,100) employees from a month before. It effectively rolls back the numbers to September 2021.
When adjusted for season, the data looks a lot better. Seasonally adjusted employees reached 17.2 million in February, up 0.8% (142,900) employees. Over 1.3 million jobs are on paper only and considered seasonal demand. Usually seasonal adjustments don’t change much, but this one feels worth mentioning. Especially since wages don’t seem to be reflecting the tight labor market narrative.
Canadian Average Wages Are Falling In Real Terms
Speaking of wage growth, in a tight labor market with high inflation pay should be soaring, right? Not the case, it appears. Employees earned an average of $1,160 in February, up 2.4% from last year. In any other year, that would be a great surge. This year, where CPI came in at 5.7% during the same period, means real wages fell 3.3% — not great. Subsequent inflation data has already been reported, and most likely further outpaced wages.
Canadian Average Weekly Wage
The weekly earnings of an average payroll employee in Canada, including overtime. Expressed in current and January 2020 dollars.
Source: Statistics Canada; Better Dwelling.
Canadian Job Vacancies Remain Elevated
Canada still has a lot of jobs waiting to be filled and few people interested in filling those spots. Job vacancies came in at 826,500 jobs, down 0.5% from a month before. This is down 16.4% (-161,800) from the record high reached in September 2021. Falling vacancies mean labor market pressures are easing, but let’s not get ahead of ourselves. Job vacancies are still over 60% higher than they were at the start of 2020, so this is still very high. It’s just not as high.
Canadian Job Vacancies
The monthly number of unfilled jobs in Canada.
Source: Statistics Canada; Better Dwelling.
February payroll data was mixed as real wages fell with elevated job vacancies. High inflation isn’t translating into higher wages (yet), meaning households are taking home less. It’s long been an issue that wages have failed to keep up with housing in Canada. However, it’s fairly rare to see wages fail to keep up with inflation — especially while this is supposed to be a great economy.
