Many Canadians are still jobless for long stretches of time, while the number of people stuck in part-time work who’d prefer a full-time job remains high.
While the broadest measure of the country’s labour market – the unemployment rate – has been gradually easing, the Bank of Canada issued a more nuanced reading of the health of the jobs market Wednesday.
(See the accompanying infographic or click here .)
Its observations come as the central bank downgraded its economic forecast for this year, and kept its interest rates on hold. It noted that though the jobless rate has ebbed in recent months – it hit a four-year low in December of 7.1 per cent – other indicators on the health of the jobs market show lingering softness.
“The average duration of unemployment and the proportion of involuntary part-time workers have remained at elevated levels, while average hours worked remain relatively low,” the bank said in its monetary policy report.
Earnings growth has been sluggish, it added. “Wage growth has also continued to be moderate, consistent with the persistence of slack in the labour market.”
Looking ahead, growth in labour compensation is expected to “stay modest,” the central bank said.
The unemployment rate remains a full percentage point above pre-recession levels and 1.36 million Canadians are currently without work, Statistics Canada data show.
Ebbing concerns over labour shortages also point to some slack in the jobs market. The portion of firms reporting labour shortages declined in the central bank’s last business outlook survey, to a level “well below its historical average.”
That’s not the only soft spot in the economy. Tepid exports (hampered by a strong Canadian dollar) and record household debt (which will restrain spending) are chief reasons for the bank’s lower forecast. Inflation, too, has been more muted than expected and the Bank of Canada now sees consumer price increases staying below 2 per cent until the third quarter of 2014.