Q1 2024 Canada Labour Market Brief: Moderate Job Growth, Easing Inflation and Another Uptick in Unemployment

Actalent's quarterly Labour Market and Economy Report connects important dots between data and trends across Canada’s engineering and sciences hiring landscape. Readers can expect to learn about job growth, wage growth, inflation, unemployment rates, labour force participation rates and other key factors that impact the attraction, hiring and retention of workers.

Executive Summary

In terms of employment growth, Canada saw 75,800 jobs added in Q1 2024, a notable upturn from the Q4 2023 total of 55,100.

The average quarterly unemployment rate increased again for the fourth quarter in a row, rising steadily from 5.0% in Q1 2023 to 5.9% in Q1 2024.

Among the industries Actalent supports, Q1 2024 unemployment rates were as follows: utilities (1.1%), healthcare (1.8%), construction (5.3%), professional, scientific, and technical services (4.0%), and manufacturing (3.7%).

Year-over-year inflation cooled off significantly in Q1, starting at 3.4% and ending at 2.9%. The easing of inflation and “core” inflation (prices excluding food, energy and the effects of changes in indirect taxes) has analysts more confident that the Bank of Canada could cut interest rates as early as June.

The average hourly wage rate for all employees increased 5.1% from Q1 2023 to Q1 2024. This was close to the annual wage growth rate observed in Q4. Wage growth continued to outpace inflation, which is good news for workers. However, strong wage growth could make it difficult to curb inflation.

Looking at the overall economic picture, Canada’s real GDP per capita has declined five of the last six quarters, falling 7% below its long-term trend, according to an April report from StatCan. Still, major investments in clean energy, infrastructure and manufacturing facilities continue to bolster job creation and suggest an increased demand for STEM workers moving forward.