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The Truth about Canada's Surprising Job Data in April

Many of you told me that you had never paid this kind of attention to the Federal Government or the Bank of Canada's decisions until the last couple of years.

To be honest, I am also one of you.

I never liked politics and rarely comment on it.

Maybe on good days, we don’t pay too much attention as the government didn’t make drastic changes.

The post-pandemic world is something new to everyone.

Many crazy things are happening.

Money was printed big time to keep the economy going.

Then inflation came.

In order to control inflation, the interest rate went up 10 times.

The mortgage rate then shot up.

Today most people are paying around 40% more on their mortgage payments after renewals.

What would you do when you need to pay more from your income to mortgage?

Spend less, right?

You spend less on restaurants, less on clothing, and may even delay your plan to buy a new car or your vacation.

When there is less business, less employment is needed.

The economy is slowing down and we need a dose to boost it up.

We need the Bank of Canada to start the rate cut cycle.

How does the Bank of Canada decide when to cut the interest rate?

Well, the Bank of Canada makes decisions based on 3 factors.

  1. Inflation

  2. GDP or the Productivity

  3. Unemployment Rate.

Now the inflation is pretty much under control.

Productivity? Can be better if less people working from home.

Economists are patiently waiting for the last unemployment rate report from Statistics Canada before the rate cut decision.

Most of them do not dare to guess because the unemployment rate can swing up or down very fast, very unpredictable.

Finally, Statistics Canada reported the unemployment rate for April 2024 a couple of days ago.

And the result?

Canada has added 4 times more jobs than expected and the unemployment rate is kept at 6.1%.

Big surprise!!!

Does that mean we are seeing a growing economy and no more June rate cuts?

But wait a minute, how come 90,000 jobs were created and yet the unemployment rate is the same?

Well, this is because we are adding more people to Canada at the same time.

More people and more job opportunities balanced out.

Today I would like to talk about my 3 observations from the report which indicates the 90K jobs are just not enough.

#1 Part-Time Employees

Canada added a whopping 90,000 new jobs.

Fantastic, right?

But when I zoom into the data closer, I found that over half of these, about 50,000, are part-time positions.

What does that mean?

Well, part-time jobs usually mean working less than 40 hours a week.

It can be less than ideal for those needing full-time work, especially many newcomers who are arriving daily in Canada, looking for their new start.

Part-time roles often come with lower wages, fewer benefits, and less job security compared to full-time roles.

This can really limit how much people can spend and invest back into the economy.

I am sure the Bank of Canada is aware of this and will make their rate cut decision accordingly.

So we are moving in the right direction, we just need more full-time opportunities that offer greater stability and better support for individuals to thrive in the Canadian economy.

#2 True Employment rate

So we have added 90,000 jobs in April when compared with March this year.

The majority of the jobs are created by the private sector. Some are high pay jobs in the technology world.

What about the employment rate compared to last year in April?

On a year-over-year basis, the employment rate was actually down 0.9 percentage points.

That means the growth in the work force, that is, population aged 15 and older, outpaced employment growth.

In the past 12 months, we have added 1.1 million to the workforce in Canada but only 377,000 jobs have been created.

We had around 1 million unemployed people in Canada in April 2023 and we are adding more every month. Currently, 1.3 million people are unemployed.

With this amount of people being unemployed, what do you think the wage increase will be?

This brings us to:

#3 The wage.

Employees are expecting a raise every year to fight inflation.

But when there are more and more people to choose from, the wage increase is slowing down from 5.1% in March to 4.7% in April.

Not an alarming drop, but I am not expecting it will go back higher soon either.


Because Canada's inflation dropped to 3.4% last May and pretty much under control since then. 

To many, I think the conclusion is June rate cut may be delayed to July.

To me, I see that

Canada has more newcomers than jobs created.

More part-time jobs created than full-time jobs

Wage increase is less these days.

More jobs are created in the private sector than in the private sector.

We need more high paying jobs to allow people to spend so that the economy and GDP can grow.

We need to encourage more investors to invest in start-up and high-tech companies, not discouraging them by adding more tax on the risk they are willing to take.

After all, they are the one creating jobs.

If you are interested in hearing my perspective on things, make sure you hit the subscribe button so you won’t miss any of my updates.


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