Canada added 73,000 jobs in March, a relatively modest gain that still helped push the unemployment rate down to 5.3%, the lowest since 1976, according to data released by Statistics Canada on Friday.

It is not a coincidence that the unemployment rate is so low while inflation is at its highest level in decades. We are in an overheated economy that is nearing full employment, with a well-rounded recovery taking place across industries and demographic groups.

Given a strong labour market, robust consumer demand and soaring inflation, the Bank of Canada has more than what it needs to impose a 50 basis-point rate hike next week.

Provinces have in recent weeks continued to ease public health restrictions, which means that employment in retail; accommodation and food services; and entertainment will continue growing in April. Looking further ahead, high inflation, together with rising interest rates, will put some downward pressure on hiring demand.

The battle for talent will continue throughout the year. The worker shortage can be partially addressed by Canada’s ambitious immigration goals, which aim to welcome more than 400,000 immigrants in through 2024. Immigrants are filling the much-needed demand for workers, as evidenced by the fact that unemployment among recent immigrants is at a historic low.

The data

The increase in employment in March was driven entirely by an increase in full-time workers (93,000) and employment among those age 55 and older, a sign of increasing labor supply and retirees going back to work amid lucrative offers.

Unsurprisingly, wage growth climbed to 3.4%, with the strongest growth among highly paid professionals as workers demand more in the tight labor market.