Canada’s job vacancy rollercoaster ride is over

Canada’s job vacancy rate fell in March to its lowest level since before the pandemic, offering fresh evidence the job market is cooling ahead of next week’s Bank of Canada interest-rate decision.

Job vacancy numbers have been easing since hitting a record high of more than one million in May, 2022, as the bank raised interest rates to rein in inflation and an overheated economy. In March there were just over 610,000 job openings, resulting in a job vacancy rate of 3.4 per cent, according to the latest payroll survey by Statistics Canada.

In roughly ⅔ of sectors the rate of job openings is now at or below prepandemic levels, including finance, retail, professional and technical industries, real estate and construction.

Demand for jobs is still highest relative to early 2020 in health care, where hospitals are struggling with an acute shortage of nurses.

Bank of Canada officials have regularly cited the decline in job vacancies as proof that high interest rates are doing their job, and economists believe the latest payroll report suggests a rate cut is imminent, even though the number of jobs grew at the fastest pace since last November.

“Despite the sizable increase in employment, which still falls short of population growth, this report adds to further evidence of the labour market cooling, which is consistent with expectations for the Bank of Canada to cut rates,” Shelly Kaushik, an economist at Bank of Montreal, wrote in a note.

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