After a string of job losses to begin the year, Canada's labour market had "some signs of stabilization" in March, says Royce Mendes at Desjardins after the release of Friday's Labour Force Survey (LFS) showing the Canadian economy added back 14,000 jobs in March, leaving the unemployment rate unchanged at 6.7%.
But, he adds, all of the new positions were part-time, with full-time jobs "stable" after a "devastating" decline of 108,000 in February.
Mendes also notes while the year-over-year pace of average hourly earnings accelerated in March, the pickup was due to compositional effects as Statistics Canada said average hourly earnings rose just 3.6% when keeping the composition fixed, suggesting wages "aren't actually heating up."
The bank's tracking for Q1 gross domestic product remains around 1.5% to 2.0%, roughly in line with the Bank of Canada's January forecast.
Overall, Mendes adds, there's nothing in Friday's LFS to suggest that the economy is perking up. Despite upgrading its oil price forecasts, Desjardins continues to believe central bankers will remain on the sidelines for the remainder of this year, given persistent slack in the economy.