OTTAWA-
The Canadian economy appears to be receding from the rapid job growth seen earlier this year, with July marking the second consecutive month of job losses, although the unemployment rate remained stable.
The unemployment rate remained at 4.9% in July, the lowest since comparable record-keeping began in 1976, Statistics Canada reported Friday in its latest labor force survey. The economy lost 31,000 jobs, following a loss of 43,000 jobs in June.
The unemployment rate remained at 4.9% in July, the lowest since comparable record-keeping began in 1976, Statistics Canada reported Friday in its latest labor force survey. The economy lost 31,000 jobs, following a loss of 43,000 jobs in June.
Indeed, senior economist Brendon Bernard said that while the loss is still within the survey’s margin of error, it nonetheless signals a change.
“It looks like the jobs recovery has shifted from the accelerator pedal to a more neutral gear,” Bernard said.
Despite the decline in employment, the Canadian labor market remains exceptionally tight, with more than one million vacancies across the country. The unemployment rate is the lowest on record with comparable data dating back to 1976.
Bernard said the unemployment rate remained unchanged from June despite the loss of jobs due to a decline in the labor force participation rate.
The report notes that the proportion of people who are working or actively seeking work has fallen from the all-time high reached in March 2022.
The latest report from Statistics Canada indicates that despite the persistent labor shortage, there is no evidence of an increase in the proportion of people leaving or changing jobs.
Moreover, the participation rate of Canadians aged 25 to 54 is relatively unchanged from what it was before the pandemic.
For the month of July, the number of public sector employees decreased, while the number of self-employed increased. The number of workers in the private sector changed little.
CIBC senior economist Andrew Grantham noted July’s job losses were concentrated in the services sector, including wholesale and retail trade, education and health care in an email sent on Friday morning.
“With some of these sectors showing high vacancy rates, labor supply rather than demand appears to be the main issue,” Grantham said.
Bernard said he expected a stronger recovery in the accommodation sector after being hit hard by the pandemic, but the momentum did not materialize.
“I think part of the story is just that people have moved on to other areas,” Bernard said.
The pace of wage growth was also flat from June, with average hourly earnings rising 5.2% year over year.
The Statistics Canada report also looked at the continuing shortage of health care workers, with a focus on nurses. According to Statistics Canada, more than one in five nurses worked paid overtime in July, the highest level since comparable data became available in 1997.
By comparison, about 10% of all other employees worked overtime in July.
As Canada faced the seventh wave of COVID-19 infections, 11.2% of nurses were on sick leave for at least part of the week when the Labor Force Survey was conducted.
The Bank of Canada is paying close attention to employment levels across the country as it prepares to make its next key interest rate announcement in September, when it is expected to raise interest rates once again. .
As economic growth slows in the country as the central bank attempts to rein in inflation with higher interest rates, economists have noted that the tight labor market makes the slowdown unique in its nature.
CIBC expects the central bank to justify another outsized rate hike by pointing to Canada’s historically low unemployment rate and continued wage growth.
“Evidence that the economy is slowing due to weakening demand, rather than supply constraints, will bring a pause in this rate hike cycle after the next hike,” Grantham said.
A quick look at employment in Canada in July (previous month’s numbers in brackets):
- Unemployment rate: 4.9% (4.9)
- Employment rate: 61.6% (61.7)
- Participation rate: 64.7% (64.9)
- Number of unemployed: 1,007,100 (1,003,500)
- Number of jobs: 19,566,500 (19,597,100)
- Youth unemployment rate (15-24 years): 9.2% (9.2)
- Unemployment rate for men (25 years and over): 4.2% (4.3)
- Female unemployment rate (25+): 4.2% (4.0)
Here are last month’s unemployment rates by province (previous month’s numbers in parentheses):
- Newfoundland and Labrador 10.2% (9.9)
- Prince Edward Island 5.7% (4.9)
- Nova Scotia 5.9% (7.0)
- New Brunswick 7.1% (6.1)
- Quebec 4.1% (4.3)
- Ontario 5.3% (5.1)
- Manitoba 3.5% (3.8)
- Saskatchewan 4.0% (3.9)
- Alberta 4.8% (4.9)
- British Columbia 4.7% (4.6)
Statistics Canada also released seasonally adjusted three-month moving average unemployment rates for major cities. He cautions, however, that the numbers can fluctuate widely as they are based on small statistical samples. Here are last month’s unemployment rates by city (previous month’s numbers in parentheses):
- St. John’s, NL 6.0% (6.3)
- Halifax 4.9% (4.6)
- Moncton, NB 4.6% (4.2)
- Saint John, NB 7.8% (7.4)
- Saguenay, Que. 3.3% (3.4)
- Quebec 2.9% (3.0)
- Sherbrooke, Que. 3.6% (3.4)
- Trois-Rivières, Que. 3.2% (3.2)
- Montreal 4.8% (4.8)
- Gatineau, Que. 3.5% (2.8)
- Ottawa 3.5% (3.9)
- Kingston, Ont. 5.4% (6.0)
- Peterborough, Ont. 6.1% (6.2)
- Oshawa, Ont. 4.8% (4.9)
- Toronto 5.9% (6.1)
- Hamilton, Ont. 4.3% (4.6)
- St. Catharines-Niagara, Ont. 4.9% (4.5)
- Kitchener-Cambridge-Waterloo, Ont. 5.1% (5.1)
- Brantford, Ont. 3.4% (3.9)
- Guelph, Ont. 3.2% (4.5)
- London, Ont. 6.1% (5.8)
- Windsor, Ont. 6.5% (5.4)
- Barrie, Ont. 5.4% (6.0)
- Greater Sudbury, Ont. 4.5% (4.3)
- Thunder Bay, Ont. 4.6% (4.3)
- Winnipeg 4.2% (4.9)
- Regina 3.9% (5.2)
- Saskatoon 4.3% (4.4)
- Calgary 5.0% (5.5)
- Edmonton 5.1% (5.9)
- Kelowna, BC 4.0% (4.0)
- Abbotsford-Mission, BC 4.9% (4.5)
- Vancouver 4.7% (5.0)
- Victoria 4.3% (4.1)
This report from The Canadian Press was first published on August 5, 2022
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