Canadian wage growth hits fastest pace since 2009, but economy sheds jobs

Wage growth accelerated last month to its fastest clip in more than decade, according to numbers released Friday from Statistics Canada.

The 4.5 per cent burst came in a month that also produced less-positive data: the unemployment rate moved up to 5.7 per cent as Canada shed 24,200 jobs.

The increase in wages — as measured by year-over-year average hourly wage growth for all employees — marked the indicator's strongest month since January 2009.

The reading, one of several wage measures closely watched by the Bank of Canada, was 3.8 per cent in June and 2.8 per cent in May. In Quebec, wage growth sped up to nearly 6.2 per cent, while Ontario's number was 5.1 per cent.

In terms of job creation, the economy saw its weakest three-month stretch since early 2018. Canada had a been on a healthy run of monthly employment gains that began last summer.

The survey found the numbers were nearly flat between May and July, a period that saw Canada add an average of 400 jobs per month. The agency cautions, however, that the recent monthly readings have been small enough that they're within the margin of error and, therefore, statistically insignificant.

Even with the July decline, compared to a year earlier, the numbers show Canada added 353,000 new positions — almost all of which were full time — for an encouraging overall increase of 1.9 per cent.

"Wage gains accelerated well beyond market expectations, suggesting that the recent pause in net hiring may be reflective of tight labour conditions," TD senior economist Brian DePratto wrote in a report Friday to clients.

"Unlike the relatively hot (gross domestic product) figures of late, the employment 'three-peat' is one of effectively zero net job gains since April. This is concerning at first glance, but we should remember that this pause in job growth is coming on the heels of a string of robust gains earlier in the year."

The July unemployment rate remained near historic lows even after edging up to 5.7 per cent from 5.5 per cent in June. The rate was 5.4 per cent in May, which was its lowest mark since 1976.

The Canadian dollar dropped after Statistics Canada released the numbers, but started to regain lost ground.

A closer look at the numbers shows the economy lost 69,300 private-sector employee positions last month, while the public sector gained 17,500 jobs.

Alberta, Nova Scotia and New Brunswick posted notable declines in employment last month — and jobless rates moved higher in each of the provinces.

Quebec and Prince Edward Island added jobs last month, the report said.

Youth employment fell by about 19,000 positions, pushing the jobless rate up 0.7 percentage points to 11.4 per cent.

The number of positions for core-aged women — between 25 and 54 years old — dropped by about 18,000.