Reuters
June 7, 2024
The Canadian economy added more jobs than expected in May, the jobless rate ticked up to 6.2 per cent, and the growth rate of wages accelerated to a four-month high, data showed on Friday.
The economy added a net 26,700 jobs, more than the 22,500 job gain forecast by analysts in a Reuters poll.
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The unemployment rate ticked up to a 28-month high of 6.2 per cent from 6.1 per cent in April, matching forecasts. The jobless rate, on an uptrend up over the past year, has risen 1.1 percentage points since April 2023, Statistics Canada data showed.
The employment gains in May were driven by part-time work, which more than offset full-time positions lost in the month, StatCan said. StatCan noted that the proportion of part-time workers who could not find a full-time job or who worked part-time due to poor business conditions was 18.2 per cent in May, the highest since December 2021.
The average hourly wage growth for permanent employees accelerated to an annual rate of 5.2 per cent from 4.8 per cent in April, Statistics Canada said. The wage growth rate - closely tracked by the Bank of Canada (BoC) because of its effect on inflation - was the highest since January's 5.3 per cent rate.
The average Canadian employee made $34.94 per hour last month, an increase of $1.69 over last year.
The acceleration in wages may be a point of concern for the central bank, which trimmed its key policy rate on Wednesday and indicated further easing would be gradual and dependent on data. The bank will have another month's job data before its next rate announcement is on July 24, when money markets see a 50 per cent chance of another rate cut.
In May, employment in the goods sector decreased by a net 20,700 jobs, mainly in construction, while the service sectors gained a net 47,400 positions, led by health care and social assistance as well as finance-related jobs.
(Reporting by Ismail Shakil in Ottawa; Editing by Dale Smith)
Canada's unemployment rate rises to 6.2% in May, economy adds 27,000 jobs
The Canadian Press
Canada’s unemployment rate ticked up to 6.2 per cent in May as the job market continued to show signs of weakness.
Statistics Canada’s latest labour force survey showed the economy added 27,000 jobs last month – too modest of a gain to keep the unemployment rate from rising by a tenth of a percentage point.
The report suggests the Canadian job market continues to soften as high interest rates weigh on consumers and businesses.
Of those who were unemployed in April, just under a quarter found work the next month, the report said. That’s below the pre-pandemic average of 31.5 per cent for the same months in 2017, 2018 and 2019.
“A lower proportion of unemployed people transitioning into employment may indicate that people are facing greater difficulties finding work in the current labour market,” the report said.
More Canadians are also finding themselves working part-time because they don’t have better options.
Statistics Canada says the involuntary part-time rate, which refers to the proportion of part-time workers who could not find full-time work or worked part-time because of weak business conditions – was 18.2 per cent in May. That’s up from 15.4 per cent a year prior.
Young people have also felt the consequences of job market slowdown. The report notes that for returning students aged 20 to 24, their employment rate was down 2.9 per cent from a year ago.
Meanwhile, wage growth remained strong in May as average hourly wages rose 5.1 per cent from a year ago, reaching $34.94.
Employment was up in health care and social assistance, finance, insurance, real estate, rental and leasing, business, building and other support services as well as accommodation and food services.
Meanwhile, employment fell in construction, transportation and warehousing and utilities.
The data release comes two days after the Bank of Canada opted to lower interest rates for the first time in four years, citing easing inflation and the weakening economy.
The central bank lowered its key interest rate by a quarter of a percentage point to 4.75 per cent and signalled that more rate cuts would be on the way, so long as inflation continues to slow.
This report by The Canadian Press was first published June 7, 2024.
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