Canada's job market added 337,000 positions in February, around three times as many economists expected.
Statistics Canada says the gains more than offset losses in January brought on by public health restrictions to limit the spread of the Omicron variant.
The unemployment rate fell from 6.5 per cent in January to 5.5 per cent in February, which is even lower than in February 2020 (5.7 per cent) and near a record low (5.4 per cent)
reached in May 2019.
As businesses affected by the pandemic reopened, jobs returned in sectors like accommodation and food services (+114,000), and information, culture and recreation (73,000) industries.
Job growth was driven entirely by private-sector work. There were gains in both full-time (+122,000) and part-time work (215,000).
The proportion of employees absent from work due to illness fell to 6.2 per cent after hitting a record high of 10 per cent in January.
Total hours worked rose 3.6 per cent, topping February 2020. Hourly wages increased 3.1 per cent year over year.
Challenges for employers
A strong market like this means employers will have more trouble luring and keeping employees, especially as they return to the office. Canadians are paying higher prices for basic
necessities and they want flexibility around working from home.
High vacancies are also a challenge for some employers.
"Nearly one million job openings are here to stay unless Canada does something profoundly different. Businesses desperately need talent and the general policy response has been
underwhelming. Without a silver bullet remedy, the tough work is politically unappealing," said Leah Nord, senior director of workforce strategies and inclusive growth at the Canadian
Chamber of Commerce.
"There is no easy fix, because Canada urgently needs a comprehensive strategy that looks at immigration, re-skilling and up-skilling, new training approaches, and talent pipeline
management systems all working together."
The Bank of Canada on track for rate hikes
Royce Mendes, head of macro strategy at Desjardins says the blockbuster jobs report puts Canada’s labour market at or very close to full employment.
“As a result, the Bank of Canada will be able to confidently hike rates again next month while at the same time announcing the beginning of its quantitative tightening program.”
“Yields are up at the short-end of the GoC curve and the Canadian dollar is strengthening as markets digest the very positive economic developments in February.”
Bank of Canada governor Tiff Macklem has said a 50 basis point hike is not off the table.
