For the first time since the epidemic, the number of open vacant positions in Canada decreased, easing from record highs and signaling a potential turning point in the country’s labor market.
According to data released by Statistics Canada on Monday, openings decreased 3.3% on a seasonally adjusted basis to 959,615 in the third quarter. Although the government did not gather statistics during the worst of the Covid-19 outbreak, that is likely the first quarter in which the number of openings has decreased in more than two years.
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The number of open positions as a percentage of all positions decreased from 5.7% in the previous quarter to 5.4% between July and September. Comparing that to 3.3% in the first quarter of 2020, that is still high.
The numbers released on Monday indicate that as the economy slows and rising interest rates take hold, Canada’s previously scorching labor market has begun to relax. Even while it is still high in comparison to prior levels, a persistent decline in the number of open positions often corresponds with a slowing in demand.
This will also relieve some of the strain on wage growth, which has consistently surpassed a 5% annual pace. That’s good news for Bank of Canada policymakers, who have openly indicated their worry that if conditions remain, the overheated labor market and strong inflation could lead to a wage-price spiral.
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The central bank’s efforts to orchestrate a “soft-landing” for the economy depend heavily on vacancy statistics. The best case scenario for Governor Tiff Macklem and his staff is rebalancing the labor market, returning inflation to their objective of 2%, while reducing the number of job openings and actual job losses compared to previous downturns.
