Canadian economy Job losses were recorded for the first time since January while the unemployment rate fell to another record low.
In its latest workforce survey released Friday, Statistics Canada said the country lost 43,000 jobs in June as the unemployment rate dropped to 4.9%.
The unemployment rate for May was 5.1%, the lowest since at least 1976, according to comparable data.
“The job market looks to remain very strong after looking at some of the monthly noise,” said Bank of Montreal senior economist Robert Kavcic in an email.
Going forward, Kavcic said the BMO is expecting a “meaningful contraction of the economy by the end of the year”.
The Bank of Canada is expected to raise its key interest rate on Wednesday, with most economists predicting an increase of three-quarters of a percentage point.
A recent study from the Canadian Center for Policy Alternatives warned that rapidly rising interest rates could tip the Canadian economy into recession and could cause significant “collateral damage,” including 850,000 job loss.
For now, however, CIBC chief economist Avery Shenfeld said the Bank of Canada would be discouraged from raising rates more aggressively, noting that working hours rose 1.3% and job decline work is offset by lower labor force participation.
“By itself, the decline in headline jobs is not yet conclusive evidence of a decline that will prevent the Bank of Canada from rallying 75 basis points next week,” Shenfeld said in an email. an email.
Statistics Canada said the June drop in unemployment was attributed to fewer people looking for work, while job losses were attributed to a drop in 59,000 freelance jobs.
For business owners, the drop in the labor force participation rate only adds to their labor shortage scourge.
Mark Kitching, owner of the Waldo’s on King pub and pub in London, Ont., says the hiring challenges are ongoing. He said he could hire two or three more kitchen staff but didn’t get any applicants.
“I talked to people in my industry and we were all having the same problem,” says Kitching.
The vacancies at Waldo cause employees to work overtime, which Kitching says makes operations more expensive and stressful.
June also saw faster wage growth, with average hourly wages up 5.2% year over year to $31.24.
Kavcic said previous wage growth numbers are lagging and fail to capture “the reality on the ground”.
“These numbers now better reflect conditions in the real economy,” he said.
Compared to pre-pandemic wage growth, June recorded the fastest growth since comparative data was collected in 1998. However, June’s wage growth was still below the recent inflation rate. as much as 7.7% reported in May.
Wage growth was led by gains in non-union workers, who saw their wages rise 6.1 percent, while unionized workers saw a 6.1 percent increase in wages. wage growth was slower at 3.7%.
Employment in the public and private sectors remained stable.
Employment in manufacturing and services fell by 76,000, erasing gains made at the beginning of the year. The biggest drop in employment was in the retail trade sector. The report said data over the next few months could help answer whether the drop was due to changing consumer behavior as inflation remained high.
Employment in the good manufacturing sector has rebounded, with 33,000 jobs added.
© 2022 Canadian Press
