Reflecting on recent wage and employment data from North America, a National Bank of Canada (NBC) strategist and analyst said in a Friday report that he’s hopeful domestic wages can withstand a fourth Covid-19 wave.

Yet, “As U.S. jobs data demonstrated [on Sept. 3], certain Q3 developments have been disquieting,” said Warren Lovely, also a managing director at NBC.

“Canadian wages and salaries lost some momentum in the second quarter, as the Canadian economy hit another Covid pothole,” he said. As such, he’s watching the progress of new Covid-19 variants and global supply chains that are “snarled.”

What’s notable, according to Lovely, is that American wages and salaries had fully bounced back from pandemic lows as of July. In Canada, meanwhile, “we estimate that national wages and salaries are 3.5% below ‘potential’, based on the pre-virus trend,” he said.

Provincial analysis shows uneven effects across the country. For example, provinces in Atlantic Canada are faring well — with solid wage and salary data, and lower budget shortfalls — while Ontario wage growth was stagnant between the first and second quarters, he said.

On the positive end, Quebec logged 11.5% annualized growth in wages for the same period. Alberta, too, has “gained important momentum of late,” with no other province seeing faster wage growth in Q2, Lovely noted.

Wage growth was also uneven across industries. In the first half of 2021, wages and salaries for goods-producing jobs across Canada rose by 9.1% compared with the same period in 2020, while wages and salaries for service jobs rose by 8.3%. However, year-over-year subsector wage changes ranged from -4.0% among utilities workers to 18.6% among federal government workers. Finance and real estate workers saw their wages increase by 6.8% year over year.

Factors to watch include GDP growth, fiscal support measures and the overall impact of Covid-19 trends.