The Canadian economy added 41,000 jobs in February as employment gains continue to lag strong population growth in the country.
The federal agency’s labour force survey released Friday says the unemployment rate ticked up to 5.8% last month.
Job gains, which were driven by full-time employment, were spread across several industries in the services-producing sector. The strongest employment growth was in accommodation and food services.
High interest rates are putting a drag on the economy as consumers pull back spending, causing a slowdown in sales for businesses. But strong population growth appears to be offsetting some of those effects, including in the labour market.
“Certainly, that overwhelmingly large rise in full-time jobs is quite impressive,” said BMO chief economist Douglas Porter in an interview.
“[But] it’s quite clear also that the numbers are being heavily influenced by the incredibly rapid population growth we’re seeing.”
High population growth has added more consumers and workers to the economy, allowing for ongoing job gains in the country.
But other measures of employment paint a weaker picture of the labour market.
Statistics Canada has been putting more emphasis on the employment rate in its reports recently to capture whether job gains are keeping up with population growth.
The federal agency notes in Friday’s report that the employment rate — which represents the proportion of Canadians aged 15 years and older who are employed — fell for a fifth consecutive month in February.
That’s the longest period of consecutive decreases since the six-month period ending in April 2009.
Porter says the decline in the employment rate is also being influenced by the greying population.
“At the same time as we have this very rapid population growth and immigration growth, we’ve also got, of course, a lot of people who are hitting the age 65 every single month,” he said.
Meanwhile, wages continue to grow rapidly in Canada. Average hourly wages were up 5% from a year ago, down from a rate of 5.3% in January.
Economists reacting to Friday’s jobs report say it shouldn’t move the needle for the Bank of Canada.
The central bank, which is holding its key interest rate at 5%, is widely expected to begin lowering its benchmark rate in June.
On Wednesday, governor Tiff Macklem was tight-lipped about the future path of interest rates.
“With inflation still close to 3% and underlying inflationary pressures persisting, the assessment of governing council is that we need to give higher rates more time to do their work,” said Macklem in a news conference.
“We’ve come a long way in our fight against high inflation. But it’s still too early to loosen the restrictive policy that has gotten us this far.”