Workforce growth projected to lead to stronger purchasing power

by Ephraim Vecina on 13 Jul 2018

Amid a highly competitive employment environment, Canada’s workforce has experienced the greatest surge of employees in over half a decade – a trend that, if it remains consistent, might prove to be a boon for household incomes laboring under interest rate hikes and elevated housing prices.

The workforce saw 75,600 new additions in June, the biggest month-over-month increase in 6 years, according to Statistics Canada. Employment jumped by 31,800 in the same month, Bloomberg reported.

June’s employment growth, which was the second highest of 2018 so far, exceeded predictions of an increase of 20,000.

In terms of demographics, 27,400 new labor force participants were 24 years old or younger.

Read more: Households increasingly leaning upon debt to stave off insolvency

This accompanied similarly noticeable pay gains, with average hourly wages increasing by 3.6% year-over-year in June. Although slightly weaker than the 3.9% in May, it still marked one of the highest readings since last decade’s recession.

However, the labor force surge represented only less than half of new job seekers. June 2018 saw unemployment go up to an 8-month high of 6%.

Moreover, StatsCan noted that June’s employment gain was in large part due to part-time positions being filled up (22,700 month-over-month increase). Full-time employment grew by only 9,100, while self-employment went up by 22,000.

 

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