Governing Council of the European Central Bank held in Frankfurt am Main on Wednesday and Thursday, 9-10 March 2022

In Canada total employment rose by 73,000 (+0.4%) in March, driven by an increase of 93,000 (+0.6%) in full-time work. In the six months since September 2021, when employment first returned to its pre-pandemic level, Canada’s economy and labour market have adapted and evolved in response to a number of challenges, including the gradual easing of public health measures, record-high job vacancies and supply chain disruptions.

During this period, employment has increased by 463,000 (+2.4%), with retail trade (+122,000), construction (+110,000), health care and social assistance (+62,000), and information, culture and recreation (+62,000) being the leading contributors to the six-month increase.

In the context of a tightening labour market, average hourly wages for employees rose 3.4% (+$1.03) on a year-over-year basis in March, up from 3.1% in February. In February, the Consumer Price Index was up 5.7% on a year-over-year basis. Year-over-year wage growth among all employees (+3.4%) remains lower than the average recorded during the second half of 2019 (+4.3%) when similarly tight labour market conditions were observed (not seasonally adjusted).

The ECB monetary policy meeting made the following projection after their March 9-10 meeting: the variables used in the technical assumptions had already changed significantly since the 28 February projection cut-off date, which had already been moved back from 24 February on account of the Russian invasion of Ukraine. The projection exercise foresaw real GDP growing by 3.7% in 2022. This represented a downward revision of 0.5 percentage points for 2022, which was mainly due to the impact of the Ukraine crisis on energy prices, confidence and trade.

GDP growth in 2023 and 2024 was broadly unrevised from the December 2021 Eurosystem staff projections. On the nominal side, following a series of unprecedented energy price shocks, headline inflation was now expected to average 5.1% and core inflation 2.6% in 2022.

Headline inflation in the Harmonised Index of Consumer Prices (HICP) was expected to remain slightly above 2.0% in 2023 and to fall to 1.9% in 2024. Since the December 2021 projections, headline inflation had been revised up by 1.9 percentage points and core inflation by 0.7 percentage points for 2022.

In the US the Department of Labor provided early data on unemployment insurance weekly claims. In the week ending April 2, the advance figure for seasonally adjusted initial claims was 166,000, a decrease of 5,000 from the previous week’s revised level.

The previous week’s level was revised down by 31,000 from 202,000 to 171,000. The 4-week moving average was 170,000, a decrease of 8,000 from the previous week’s revised average. The previous week’s average was revised down by 30,500 from 208,500 to 178,000.

The advance seasonally adjusted insured unemployment rate was 1.1 percent for the week ending March 26, unchanged from the previous week’s revised rate. The previous week’s rate was revised up by 0.2 from 0.9 to 1.1 percent. The advance number for seasonally adjusted insured unemployment during the week ending March 26 was 1,523,000, an increase of 17,000 from the previous week’s revised level.

The previous week’s level was revised up 199,000 from 1,307,000 to 1,506,000. The 4-week moving average was 1,541,250, a decrease of 35,250 from the previous week’s revised average. The previous week’s average was revised up by 187,500 from 1,389,000 to 1,576,500.