UPDATED: Ottawa-Gatineau's jobless rate falls to 4.6% in April amid strong growth

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Ottawa-Gatineau’s unemployment rate dipped in April as the region’s job-creation engine was more than a match for the growing number of people entering the workforce.

Statistics Canada said Friday the National Capital Region’s jobless rate fell to 4.6 per cent last month, down from 4.9 per cent in March, as the local economy added 18,000 new jobs.

That surge in employment more than offset the rapid growth of the labour force, which swelled by 15,700 as more people began to actively search for work. 

Meanwhile, the participation rate – which compares the size of the region’s labour force to the region’s population of working-age residents – continued to climb. It rose to 67.8 per cent last month, up from 66.6 per cent in March and 65.9 per cent in February as it recovers from a slide that saw the rate drop from nearly 70 per cent in the middle of last year.

April’s gains in the three-month rolling employment average were spread across a wide variety of sectors, suggesting the economy is picking up steam as most COVID-related public-health measures have been lifted or eased.

Among the sectors showing big growth was the region’s largest employer, the public administration sector, which added 6,600 positions. 

Other gainers included education, which picked up 3,500 jobs, and the hard-hit retail and food services and accommodation sectors, which grew by 2,300 and 1,600 jobs respectively.

Health-care sector shrinks

Meanwhile, the transportation sector shed a net 3,000 jobs, while the health-care sector shrunk by a net 2,500 positions. 

Across the country, the unemployment rate fell to another record low in April even as the pace of job creation slowed, suggesting a tightening of the labour market.

StatsCan said Canada’s jobless rate fell 5.2 per cent for April as the economy added 15,300 jobs.

That's down slightly compared with the previous record low unemployment rate of 5.3 per cent set in March when 72,500 jobs were added.

“All of these indicators that we look at all tell the same story, and that is a story of a shrinking labour pool and an overheated labour market,” said Tu Nguyen, economist with accounting and consultancy firm RSM Canada.

Nguyen pointed to the record low unemployment rate of 4.3 per cent for core-aged workers aged 25 to 54 and the lowest rate of involuntary part-time employment on record at 15.7 per cent as indicators of how tight the job market has become.

Statistics Canada also said the adjusted unemployment rate – which includes people who wanted a job, but did not look for one – was 7.2 per cent in April, below the pre-pandemic level of 7.4 per cent.

Bank of Montreal chief economist Douglas Porter said the moderate gain in employment is a sign of much more normal conditions, but also one where the supply of new workers may be starting to be the binding constraint on growth.

“For the Bank of Canada, this will do nothing to dissuade them from their tightening path, not with headline inflation aiming at seven per cent,'' he wrote in a note to clients.

Inflation in March reached 6.7 per cent, and the Bank of Canada has said it expects inflation to average almost six per cent in the first half of the year. The central bank has indicated additional interest rate hikes are on their way in the coming months.

“The one item of news here that may help contain just how much the Bank ultimately needs to hike is the ongoing calmness of wages,” Porter said.

Average hourly wages were up 3.3 per cent year over year in April compared with a year-over-year gain of 3.4 per cent in March.

Lowest jobless rate in decades

Statistics Canada did note that those making less than $20 per hour in April made up 25.9 per cent of all employees, down from 35.5 per cent in April 2019. Meanwhile, employees earning $40 or more per hour represented 24.5 per cent of employees, up from 18 per cent three years earlier.

The jobless rate in April fell to its lowest point since at least 1976, which is as far back as comparable data goes, as the number of jobs in professional, scientific and technical services rose by 15,000 in April and the public administration category gained 17,000.

The number of people working in retail trade fell by 22,000 in April, and those working in construction dropped by 21,000.

However, the effects of the pandemic continued to be felt in the economy as the total hours worked in April fell 1.9 per cent compared with March, due in part to illness-related absences from work. A blizzard in Manitoba also affected the hours worked in that province.

Looking ahead, Nguyen said she expects the job market to remain tight through the summer as business and consumer demand remain strong and workers can't materialize out of thin air.

“Businesses and consumers still have quite a lot of savings from the pandemic, and they are still going out purchasing goods and services and we don't have a whole lot of additional supply to the labour market,” she said.

However, Nguyen said she's watching the proportion of long-term unemployed among the jobless.

Long-term unemployment accounted for 20.6 per cent of total unemployment in April compared with 15.6 per cent in February 2020, before the pandemic.

Nguyen said it points to an issue of a mismatch between the skills of people who have been unemployed for a long time and an overheated labour market that's looking for workers.

“Maybe these workers feel like they're being left behind because wherever you look now, you see reports about a heated labour market and yet they can't seem to find jobs,” she said.

– With additional reporting from the Canadian Press