Canadian Chamber of Commerce’s Post

After multiple rounds of interest rate hikes by the Central Bank, the Canadian labour market is finally showing signs of softening. As the hikes start affecting economic activities, people start assessing labour market conditions based on that new information. Psychology also plays a part to some extent. As people sense a relative decline in economic conditions, they also consider that the cost of switching for another job as gone up. Hence, job tenure, which is the variable used to measure this outcome, goes up as well. This is generally not a good news for those trying to enter the labour market as it becomes more rigid. Although the situation greatly varies across sectors (there are still labor shortages in some areas), one can expect less opportunities in others. The situation could further deteriorates once declining hiring rates and increasing job tenure cross one another. However, we are not there yet. The next few months should give us more information about the direction of these trends.

The latest labour market report from the U.S. was strong with nearly double the expected jobs added in January and wage growth running hot. This may delay the Fed’s initial rate cut to the summer.   Canada’s jobs report comes out next week with Bay Street economists looking for employment to have risen by 15,000 in January. Even with this increase however job gains would lag population growth and apply upward pressure to the unemployment rate. We think that over time weaker labour market conditions will weigh on wage growth which continued to run at a rapid pace in late 2023.   Join my interview with Jon Erlichman as we delve into the latest U.S. job data and anticipate next week's Canadian employment figures. https://lnkd.in/gHeVNAKz

The U.S. #economy continues to show impressive resilience. ⭕ 336k jobs added in September ⭕ Twice the market expectations ⭕ Wage growth of 4.2% (annualized) ⭕ Unemployment rate is 3.8% ⭕ July & Auguest job growth figures were revised up What does this mean? Wage growth has slowed but job growth remains strong. It's likely status quo for the current interest rate environment and increases the likelihood of a "soft landing" for the economy (i.e. no recession). #hiring #jobs #inflation

📢 The April Monthly Labour Market Update is out now. Read 👉 https://bit.ly/MLMUApr2024 Duelling inflation forecasts: what do April’s labour force figures mean? - Unemployment rate edges over 4 per cent despite solid employment growth, albeit only in part-time jobs. - Vacancies and wages moderate, consistent with a gradual softening in the labour market. - A rapid fall in the rate of employment growth and/or in immigration needed for the Treasurer’s optimistic scenario for inflation to fall in place for 2024-25. Read the full MLMU - April 2024 now 👉 https://bit.ly/MLMUApr2024 Authors: Mike Dockery and Alan Duncan Special thanks: Valentina Sanchez and Alex Buckland #MLMU #labourmarket #jobs #economics #unemployment #unemploymentrate

🔝 Why are Labour markets breaking the historical rule ? ➡️Open vacancies have been reduced by more than 20% on average from their peak - a historical rapid decline that helps to trim wage growth ➡️ Even as the economy slows and firms cut jobs ads, they try to hang on existing workers to avoid making the mistake from the Covid times. ➡️ Re-hiring will be notably difficult as the unemployment rate is notably lower than expected given the current economic growth.

https://lnkd.in/eM2xibGU Simply put, maximum employment – sometimes called full employment – is the highest level of employment the economy can sustain without generating unwelcome inflation. It describes an economy in which nearly everyone who wants to work has a job.