The economy delivered 32,300 net new jobs last month as Canada generated a rush of full-time work that helped keep the national unemployment rate at its record low.

Statistics Canada said Friday the jobless rate stayed at 5.8% in March for a second-consecutive month—and for the third time since December—to match its lowest mark since the agency started measuring the indicator in 1976. The only other time the rate slipped to this level was 2007.

The March gains were driven by a surge in full-time work. The labour-market survey showed the workforce added 68,300 full-time positions, while the number of part-time jobs decreased by 35,900.

However, the data also reveal that 19,600 of the new employee positions were created in the public sector. By comparison, the number of private-sector workers declined by 7,000.

Average hourly wage growth, which has been under close scrutiny by the Bank of Canada ahead of interest-rate decisions, strengthened in March to 3.3%, up from 3.1% the previous month.

The central bank, which will make its next rate announcement later this month, has repeatedly highlighted wage growth as a key indicator. Wage growth has been moving upward since it bottomed out at 0.5% in April 2017.

Expert analysis

“On its face, today’s report is something of a mixed bag,” says Brian DePratto, senior economist at TD, in a Friday report.

While the number of jobs added exceeded expectations for the month, he adds, “All of the gains were in full-time employment, [while] the bulk of the net change was in self-employment. Moreover, hours worked—a helpful measure of overall economic activity—turned in a soft performance.”

As a result, he’s cautious on making calls based on this report. Instead, writes DePratto, “Trends are much more informative, and they remain fairly solid. On a [six-]month moving average basis, both headline (22.2k) and full-time (36.9k) job gains remain in healthy territory, while part-time employment continues to trend lower.”

For the Bank of Canada’s April 18 announcement, he doesn’t think this report “will do much to move the needle in terms of bringing rate hikes forward.”

Derek Holt, vice-president and head of Capital Markets Economics at Scotiabank, takes a similar view. In his Friday report, he predicts the central bank will likely want to see “clearer” wage trends, and he also points to the fact that “hours worked were flat in Q1 at +0.2% q/q at a seasonally adjusted and annualized rate.”

This is material news, he says, “because GDP equals hours worked times labour productivity defined as output per hour worked. If hours went nowhere, then staying on the plus side for GDP growth rests upon productivity. That, in turn, means emphasizing activity readings that are tracking soft Q1 growth […].”

So far, he adds, growth is “quite a lot softer than the BoC forecast for Q1 coming into the year.”

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Provincial breakdown

Central Canada saw the biggest job gains in March as the two largest provinces—Ontario and Quebec—each added more than 10,000 net new positions.

Quebec gained 16,000 net new jobs, including 28,600 full-time positions, while Ontario added 10,600 net new jobs, including 16,300 full-time positions.

For Ontario, however, the gain only represented a 0.1% increase compared to the previous month. Quebec saw growth of 0.4%.

By percentage, Saskatchewan and Alberta each saw solid monthly growth. Saskatchewan’s labour force expanded 0.7%, while Alberta’s grew 0.4%.

The youth unemployment rate dipped last month to 10.9%, down from 11.1% in February, following a net gain of 17,700 new jobs.

By industry, goods-producing sectors added 21,700 positions, mostly in construction. Services sectors created 10,600 jobs, with the bulk of the increase coming from new positions in public administration.

Compared with 12 months earlier, the national workforce grew 1.6% following the creation of 296,200 jobs—with the entire increase fuelled by 335,200 new full-time positions.

But the latest numbers still suggest there are signs that Canada’s red-hot labour market could be starting to cool down, as widely expected.

Statistics Canada said employment declined by about 40,000 jobs over the first three months of 2018 for a decline of 0.2%.

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