Canadian wage growth jumps above 5% in tight labour market

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On an annual basis, average hourly wages rose 5.4 per cent to $33.16, an acceleration from the 4.5-per-cent pace in January, Statistics Canada said

Friday in a report. Financial analysts were expecting wage growth of 5.1 per cent. To an extent, the numbers were influenced by the comparison to February, 2022, when lower-paid service workers returned from COVID-19 shutdowns.

“Arriving on the heels of the January jobs jamboree, this result is far too strong for the BoC’s comfort,” Bank of Montreal chief economist Doug Porter said in a client note. “There simply is no sign that the labour market is succumbing whatsoever to the rapid-fire tightening of the past year.” There are several ways of measuring wage growth across multiple Statscan reports. They generally show that wages are rising at more than 4 per cent on an annual basis.

“Productivity growth is a good thing for the economy because it allows businesses to pay for higher wages,” Carolyn Rogers, senior deputy governor at the central bank, explained on Thursday in a speech. “If we continue to see the above-average wage growth that we’ve been seeing in Canada without stronger growth in productivity, it will be difficult to bring inflation all the way down to 2 per cent.

 

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while prices of food jump anther 20% at your local stores.

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