However, some analysts argue that the headline numbers may mask underlying labour market weakness. CIBC economist Andrew Grantham pointed to the economy’s reliance on public sector hiring, which has driven over 60% of job growth in the past year.

Another factor is the sticky issue of counting non-permanent residents, whose job prospects have deteriorated the most over the past year. Grantham suggested if a greater proportion of this group were included in the data, the unemployment rate could be 0.2% higher.

“With the unemployment rate for those non-landed immigrants that are counted having risen a lot more than the rest of the population over the past year, it’s possible that the jobless rate would actually be higher if a greater proportion of this group were included in the labour market data,” Grantham said in a statement.

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These insights are critical as the Bank of Canada likely uses labour market data to gauge economic slack, which in turn influences its interest rate decisions.