Job vacancies hit a record high in the second quarter of 2022, but employers struggling to fill those vacancies still offered wage increases that were below the rate of inflation.
Statistics Canada said on September 20 that there were nearly one million job openings in the second quarter, the highest quarterly number on record. That’s 45,000 job openings higher than the previous quarter and 42.3 percent higher than in 2021.
The vacancy rate, which measures job vacancies as a percentage of total labor demand, was 5.7 percent — also an all-time high. The growth in labor demand since the start of the pandemic has outpaced the growth in payroll employment, resulting in a record rise in job vacancies.
Statistics Canada said the high vacancy numbers in recent months have drawn attention to how unmet labor demand correlates with rising wages. In the second quarter, average gross hourly wages rose 5.3 percent to $24.05, compared to a 7.5 percent increase in the Consumer Price Index (CPI).
Wages increased more than the consumer price index in five sectors, including professional, scientific and technical services and wholesale trade. But wage increases on average were lower than the CPI in the remaining sectors, which include retail, construction, health care and social assistance.
Statistics Canada said 82.9 percent of total job openings were in sectors that delivered wage growth on par with or below the consumer price index in the second quarter.
The Bank of Canada is closely watching wage increases in setting interest rates. Bank of Canada Deputy Governor Caroline Rogers said earlier this month that policymakers are concerned about the potential for a wage price spiral, as workers demand higher wages amid a tight labor market, forcing employers to raise prices for goods and services to cover their costs. . It then causes inflation to solidify in the economy, which she described as “bad.”
Meanwhile, employers continued to face significant recruitment challenges during the quarter, filling only 44 positions for every 100 open positions. This indicates that it is getting more difficult and taking more time for employers to hire new employees.
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Sectors with a low ratio of new hires to vacancies included health care and social assistance, housing and food services, and professional, scientific and technical services.
There was an average of 1.1 jobless per job vacancy in the second quarter, down from the first quarter’s ratio of 1.3 and more than half of last year’s 2.3. Quebec and British Columbia each had a ratio of 0.8, which means there was less than one person per open position.
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