Earnings are rising at the strongest pace in more than a year, a turnaround after wage gains lagged the pace of inflation through much of 2011.
Average weekly earnings rose 3.1 per cent in April from a year earlier, the fastest pace since March, 2011, Statistics Canada’s payrolls data show. Wage growth was the key factor, but so was a pickup in average hours worked per week.
Wage growth hasn’t kept pace with the rate of inflation for much of the past year, constraining household finances as debt levels hit record highs.
That’s shifting; a firmer labour market is boosting earnings growth, while inflation is cooling from last year’s levels. The current rate of inflation, at 1.2 per cent, is the lowest in nearly two years and a far cry from last year’s peak of 3.7 per cent.
The gains, “helped by rising hours, suggests that improvements in the jobs market are helping boost households’ fortunes,” said Emanuella Enenajor, economist at CIBC World Markets, in a note.
Average earnings were $896.63 a week, a 1-per-cent gain from the prior month. Employees worked an average of 33 hours a week in April from a year earlier, the first increase after five straight months of hourly declines, the government agency said.
Earnings growth varies considerably by province, and sector.
Annual growth outstripped the national average in three sectors, all of them industrial: wholesale trade, construction and retail trade. Weekly earnings fell in the health care and social assistance sector, with declines in the nursing and residential care facilities along with ambulatory services.
By province, Newfoundland and Labrador posted the strongest annual growth, at a blistering 6.5 per cent -- bringing it to the second-highest wage level among provinces after Alberta.
Year-over-year earnings growth in Newfoundland has been above the national average since December, 2010, Statsan said.
Workers in Alberta earn on average $1,066.83 a week, the highest level in Canada.
The weakest earnings growth was in Manitoba and Ontario, with 2.1-per-cent growth.