Canadian jobs confidence driving stronger purchasing power

The nation's unemployment rate remains at near historic lows

Canadian jobs confidence driving stronger purchasing power

Confidence in stronger income is helping cultivate greater purchasing power in Canada, according to the results of a new Bloomberg-Nanos poll.

The survey found that Canadians generally look forward to increased earnings should they leave their current employment. Nearly two out of 10 respondents reported confidence in larger paychecks in the event of a job change.

“The average wage increase of people who switch jobs is very high, in the 10% to 12% range, because people are finding the right matches,” Bank of Canada Governor Stephen Poloz said in mid-December, as quoted by BNN Bloomberg. “Those matches inevitably bring higher productivity.”

Brendon Bernard, Indeed Canada economist, added that current labour market trends bode well for the nation’s purchasing power.

“We’re now several years into having unemployment in the 6% to below 6% range,” Bernard explained. “That’s going to help build confidence in the job market overall.”

Almost 300,000 jobs were added to the Canadian economy last year. Wage growth also accelerated to some of its fastest rates since the 2008-09 crisis, while the unemployment rate declined to nearly its lowest levels in four decades.

As of the end of January, the Bloomberg-Nanos Canadian Confidence Index stood at 56.4, virtually static from the level seen at the end of December.

The share of respondents who are bracing for weaker economic performance over the next six months declined to 27.9%, from the 34.2% reading at the end of 2019. Meanwhile, the proportion of those who are expecting a stronger economy increased to 15.6%, from December’s 13.4%.

The difference between those holding positive and negative viewpoints was at 12.3%, which was the smallest gap since early November.