Following a few months of disappointing numbers, the labour markets churned out 82,000 jobs in March—the largest monthly increase in more than three years. An added bonus of this latest wave of hiring is that almost all the gains were in full-time employment. This latest development in the labour market helped bring Canada’s unemployment rate down 0.2 percentage points to 7.2 per cent. At least half of the new hires were young workers (up 39,200), helping to bring the exceptionally high unemployment rate in this age group down 0.8 percentage points to 13.9 per cent. While job creation in March was significantly stronger than anticipated, the Conference Board’s latest Help-Wanted Index pointed to stronger employment gains in the near term.

Most gains were concentrated in the service sector, which added 57,500 jobs, and were shared among several industries. Health care and social assistance, and culture and recreation led the way, but public administration, professional services, and transportation and warehousing also posted increases. The goods-producing sector saw employment edge up by 24,900, with new jobs being created in manufacturing (up 11,800), construction (up 8,700), natural resources (up 6,100), and utilities (up 1,600). While manufacturing posted an increase in employment for the fourth consecutive month, employment is still 1.2 per cent lower than a year ago as a result of ongoing restructuring. On the year-over-year basis, the booming natural resource sector outpaced other industries in job creation by a wide margin, with employment in this sector up 11 per cent.

The labour markets churned out 82,000 jobs in March—the largest monthly increase in more than three years.

Regionally, employment edged down in all Atlantic provinces in March, while job creation was strong in Ontario (up 46,100) and in Quebec (up 36,400). As a result of the latest gains, the unemployment rate dropped 0.2 percentage points in Ontario and 0.5 percentage points in Quebec, bringing it to 7.4 and 7.9 per cent respectively.

Average weekly earnings of non-farm payroll employees were up 0.6 per cent in January, bringing the year-over-year growth to a modest 2 per cent, which is below the current rate of inflation. However, the growth was not uniform, with employees in some sectors of the economy faring better than those in other sectors. Earnings in retail trade, construction, wholesale trade, public administration, and manufacturing outpaced the national average. Retail trade posted the largest gain, increasing 5.6 per cent on a year-over-year basis; in the other four sectors, earnings were more closely aligned with inflation. Health care and social assistance was the lone category where nominal weekly earnings fell, declining 1.7 per cent. There were also marked differences among Canadian provinces. Newfoundland and Labrador emerged as the leader in weekly earnings growth (up 6.2 per cent), followed by Alberta (up 3.5 per cent), and British Columbia (up 3.2 per cent). The latter two provinces have some of lowest rates of inflation and, as a result, some of highest gains in real terms. The two largest provinces in Canada—Quebec and Ontario—had the lowest year-over-year rates of growth—1.8 and 0.6 per cent respectively.

The Canadian economy posted a tepid 0.1 per cent gain in January after advancing 0.5 per cent in December. Among goods-producing industries, gains were recorded in manufacturing and utilities; however, output fell in construction, mining and oil and gas extraction, and in the primary sector. Manufacturing continued to show resilience even as labour disputes unfolded in January at Caterpillar Inc.’s Electro-Motive plant in London, Ontario, and at the Rio Tinto Alcan plant in Alma, Quebec. Despite this setback in production, manufacturing output grew 0.7 per cent, the fifth consecutive monthly increase. Mining and oil and gas extraction output rolled back 0.9 per cent as a decrease in natural gas extraction outweighed the gain in crude petroleum production.

The monthly performance of the service sector was only marginally better than that of the goods sector, with output edging up 0.2 per cent. Transportation and warehousing, in tandem with gains in manufacturing, posted a 0.5 per cent increase. Strong motor vehicle sales (up 15.4 per cent) provided a boost to wholesale trade (up 0.3 per cent) but left retail trade unchanged. While vehicle sales were not enough to bring positive growth to the retail trade, they nonetheless shielded the sector against a decline. So, while retail trade remained flat in January, output would have declined 0.5 per cent without the new vehicle sales. Accommodation and food services posted a 0.7 per cent gain, in line with an increase in the number of overnight travellers to Canada.

At least half of the new hires were young workers, helping to bring the exceptionally high unemployment rate in this age group down 0.8 percentage points to 13.9 per cent.

Consumer prices continued to climb in February, posting a second consecutive monthly increase. On a monthly basis, the consumer price index (CPI) rose 0.4 percentage points, bringing the year-over-year inflation rate to 2.6 per cent. On a year-over-year basis, prices rose in seven of the eight main categories tracked by Statistics Canada. Food (up 4.1 per cent) and transportation (up 4.2 per cent) continued to lead the way, outpacing the overall inflation rate by a wide margin. Despite softer global economic growth so far this year, increased geopolitical uncertainty in the Middle East pushed oil prices (West Texas Intermediate) further above the US$100/barrel benchmark. As a result, gasoline prices advanced by 2.6 per cent in February alone and were 8.9 per cent higher than a year ago, putting upward pressure on energy (up 7.2 per cent) and transportation costs. Core inflation—which excludes the eight most volatile components of the CPI and the effects of changes in indirect taxes—also edged up by 2.3 per cent in February, leaving it a little above the Bank of Canada’s 2 per cent target.

Regionally, the biggest price increases were registered in Prince Edward Island (up 1 per cent), Ontario (up 0.7 per cent), and Quebec (up 0.6 per cent). These provinces also posted above-average inflation rates on a year-over-year basis. Compared with a year ago, Quebec households paid 3.2 per cent more for goods and services. This was the highest inflation rate among the Canadian provinces, driven by high gasoline prices (up 13.4 per cent) and an increase in indirect taxes. Year-over-year inflation in Ontario was only slightly lower, as rising electricity (up 8.9 per cent) and gasoline (up 9.5 per cent) prices pushed inflation to 2.9 per cent.