Canada’s Unemployment Rate Rises Despite Job Gains: StatsCan
Statistics Canada’s latest report reveals a mixed picture for Canada’s labor market in May, with a rise in the unemployment rate despite a gain of 27,000 jobs. Here’s a breakdown of the key findings:
Canada’s unemployment rate increased slightly from 6.1% to 6.2% in May.
Despite the rise in unemployment, the country added 27,000 jobs during the month.
While sectors like health care, social assistance, finance, and real estate saw gains, industries such as construction, transportation, warehousing, and utilities experienced losses.
The growth in employment was primarily driven by part-time positions, with a net increase of 62,000 part-time jobs, while full-time employment declined by 36,000 jobs.
Statistics Canada noted an increase in the proportion of employees working part-time involuntarily due to the inability to find full-time work. This figure rose to 18.2% in May from 15.2% a year earlier.
Leslie Preston, senior economist at TD Bank, mentioned that the Canadian economy has “geared down” following a robust jobs report in April, indicating a cooling but not a significant downturn.
Average hourly wages in Canada accelerated to 5.1% in May, up from 4.7% in April.
The Bank of Canada, which recently reduced its benchmark interest rate, is closely monitoring wage growth to determine the pace of future rate adjustments.
BMO chief economist Doug Porter highlighted concerns about wage growth but suggested that other labor market indicators could influence the Bank of Canada’s decision on future rate cuts.
While the United States experienced robust job growth in May, with employers adding 272,000 positions, Canada’s labor market faces unique challenges.
Strong job growth in the U.S. could delay expectations for rate cuts, impacting the Bank of Canada’s policy decisions.
Canada’s labor market presents a nuanced picture, with job gains accompanied by rising unemployment and concerns about wage growth. The trajectory of future rate cuts by the Bank of Canada will depend on a variety of factors, including domestic economic indicators and international developments.
