Unemployment inches up to 5.5% in July with spike in wage growth

0
124


There was little change to Canada’s job market in July as the unemployment rate inched up ever so slightly to 5.5 per cent, according to data released by Statistics Canada on Friday.

Most notably, compensation for workers spiked up, as average hourly wages grew five per cent after similar gains in May and June.

The Canadian economy lost 6,400 jobs, with the unemployment rate increasing for a third consecutive month as the growing population’s demand for work outpaces job creation. Economists had predicted a gain of 25,000 jobs.

Dawn Desjardins, chief economist at Deloitte Canada, said that while the jobs report was weaker than expected, “we’re not looking at a terrible labour market by any stretch.”

Canada’s high immigration rate has contributed to a demand for work that outpaces job creation, and unemployment rates are rising in tandem, she added.

“Over time you would anticipate that that would lead to slower wage growth, which of course is sort of what the central bank is looking for easing up in those inflation pressures.”

Other economists differed on what the Bank of Canada might do next.

Andrew Grantham, a senior economist with CIBC, wrote in a note that the combination of job loss and wage growth would mean mixed messages for the central bank as it watches for signs that inflation is coming down.

“Today’s data is unlikely to convince the Bank of Canada that the labour market has loosened enough yet to sustainably achieve its 2 [per cent inflation] target, despite the weaker headline jobs count.”

Desjardins senior economist Royce Mendes wrote that the data released on Friday reinforces the bank’s prediction that the central bank won’t raise rates again this cycle.

“The simple fact that the economy has seen employment decline in two out of the past three months suggests that the Bank of Canada’s efforts to rebalance the labour market are working,” he said.

The jobless rate was led by losses in the construction industry, which shed 45,000 jobs (-2.8 per cent)  in July. Meanwhile, employment in the health care and social assistance sector rose by 25,000 jobs (+0.9 per cent).

Employment increased modestly in Alberta, New Brunswick and Prince Edward Island, with declines in Manitoba and Saskatchewan. Other provinces held steady.

Labour market more challenging recently, says one job seeker

With a demand for work on the upswing, crowds of students and seasonal workers lined up in Toronto on Wednesday for the Canadian National Exhibition’s annual job fair.

Lucky applicants will work at The Ex, an end-of-summer event at Exhibition Place that attracts about 1.4 million people each year. Job seekers arrived with applications in hand, hoping for a summer gig with one of the event’s hundreds of vendors.

WATCH | Job seekers look for work at the Canadian National Exhibition in Toronto: 

Thousands attend the Canadian National Exhibition job fair to find work

Earlier this week at the Canadian National Exhibition, a job fair gathered three times the number of applicants compared to last year.

Laurel Fielding, who was waiting to apply for a cashier position, said the job market has been a little bit more challenging over the last few months. A summer job fell through, bringing her to The Ex.

“I think there’s a lot of opportunity, but it seems like employers are getting a little bit pickier,” she said.

“I was looking for something easy that I could do that was fun and not too challenging. But I think after this I definitely want to challenge myself a little bit more.”

Darrell Brown, CEO of the Canadian National Exhibition Association, told CBC News that the event’s job fair turnout this year was “tripled or quadrupled” from last year.

“We had fantastic turnout last year relative to what everybody else was experiencing with the labour shortages, but this year is truly astounding.”



Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here