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Quebec and Ontario Economic News

Quebec: Employment and Unemployment Are Both Stabilizing, and Wages Are Accelerating

June 7, 2024
Hélène Bégin
Principal Economist

Highlights

  • Employment is still up and down. In May, 2,100 jobs were lost, after a 19,200-job gain in April and a 18,000-job loss in March. This means that since last fall, employment has changed very little.
  • The jobless rate held at 5.1% in May. This is relatively low, albeit higher than the record low of 3.9% posted in November 2022.
  • All of the job losses in May came from full-time positions, while part-time positions remained stable.
  • May's drop in workers was concentrated in a few sectors: professional, scientific and technical services, the trade industry, and transportation and warehousing. Gains were recorded in a number of other sectors, though. 

Comments

Employment figures have been flip-flopping for several months now in Quebec. First they're up, and then they're down. And the end result? May's figures are strikingly similar to where we were in September 2023. While employment seems to be stabilizing, other labour market indicators have continued shifting over this same time.

First, the labour force—the number of people who have a job or are looking for one—is growing more quickly than employment. This can be explained in part by the rapid growth of the working-age population, particularly through immigration. At the same time, the substantially smaller number of open positions means that people are unemployed for longer periods of time, across Canada. The rise in unemployment is fairly even across the different age groups and classes of worker.

And even though the number of job vacancies is still shrinking in Quebec and Canada, wage pressures remain high. After a brief pause, the average annual hourly wage increase has accelerated in recent months. It rose to 5.1% in May. Wage growth is being driven by sticky inflation, collective bargaining agreements and companies' desire to retain their employees. Quebec's economy is showing signs of improvement External link., and businesses that can afford it are jockeying for position, getting ready to meet an eventual upswing in demand. 



Implications

Even though the Quebec economy is now sending positive signals after a difficult period last year, the labour market is still feeling the effects. Since the labour market typically lags behind overall economic performance, we expect it to deteriorate further in the next few months. The unemployment rate should therefore approach 6% by the end of 2024, before starting to improve. In the meantime, Quebec's economy will firm up and employment will eventually resume its upward trend. Given the small pool of available workers, we can expect an ongoing structural labour shortage.


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