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Canada's unemployment rate is still quite low

Canada's unemployment rate is still quite low

The Lab our Force Survey conducted by Statistics Canada indicates that the unemployment rate in Canada was once again 4.9 percent in July.

In July, Canada's unemployment rate remained stable at 4.9 percent, matching the previous month's record low. In July, the overall unemployment rate stayed at one million. In addition, 426,000 individuals who desired employment but did not actively seek employment did not fall within the definition of unemployment.

For the sixth consecutive month, there was not much of a change. The adjusted unemployment rate, which takes into consideration this prospective lab our supply source, was 6.8 percent as of this writing, which is the lowest level since comparable data have been available since 1997.

Additionally, according to Statistics Canada, the loss of 31,000 jobs in Canada's employment is not a substantial change. Between May and July, Canada shed roughly 74,000 jobs, but between May 2021 and May 2022, employment rose by more than one million.

Having said that, Canada's employment has declined for the second month running in July. Additionally, while having a record-low unemployment rate, Canada still has a tight lab-our market due to the more than one million open positions.

According to RBC economist Carrie Freestone in an economic update, "two consecutive months of decreasing employment shows that the Canadian labour market is coming into capacity constraints, with little room for upside movement." Despite a decline in job postings, there are still a lot of open positions that need to be filled, and there aren't many jobless Canadians who are qualified to fill them. Demand for employees is still quite high.

The number of people employed by the public sector decreased by 51,000 (1.2 percent) in July, marking the sector's first dip in a year. Ontario and Quebec saw the greatest concentration of the decline. Despite the month-over-month dip, there was a 5.3 percent (+215,000) increase in public sector employment since July 2021.

After dropping by 59,000 (-2.2%) in June, the number of self-employed workers rose by 34,000 (+1.3%) in July. Despite this rise, self-employment was still 214,000 (-7.4%) below its pre-pandemic February 2020 level and was flat year over year.

In the month of July, employment in the sector that provides services decreased by 53,000 (-0.3%). The largest portion of losses in this industry came from wholesale and retail trading. The number of individuals employed in the wholesale and retail sectors decreased by 27,000 (-0.9%) in July, marking the second consecutive monthly reduction. The provinces of Ontario and Quebec accounted for the bulk of the net drop.

According to Andrew Grantham of CIBC, "Job losses were oddly concentrated in the services sector, particularly wholesale and retail, education and health." "With some of those industries reporting significant vacancy rates, labour availability seems to be the main problem rather than demand. However, the main distinction between this report and the one from last month is the unanticipated slowdown in pay growth.

On a year-over-year basis, average employee hourly salaries increased by 5.2 percent (+$1.55 to $31.14) in July, almost matching the rate of growth recorded in June (+5.2 percent; +$1.54). For the second consecutive month, part-time workers' hourly pay (+5.0%; +$1.05) and full-time workers (+4.9%; +$1.52) increased at the same rate. Early in 2022, full-time employees' wages grew more quickly than part-time employees' wages.

The Consumer Price Index increased 8.1 percent on a year-over-year basis in June, the highest yearly change in almost 40 years, according to the most recent data on inflation.According to economist Liam Daly, the Conference Board of Canada media release stated that "the growing cost of living is raising the temperature at the collective bargaining table."

"Unions claim that regular yearly salary increases are simply insufficient given the pace of inflation. Workers are negotiating from a stronger position due to high vacancy rates and low unemployment rates.

The primary conclusion, according to BMO economist Doug Porter, is that the job market is still extremely tight.We continue to have the lowest unemployment rate in at least 50 years and solid pay growth, according to Porter. However, from a growth perspective, the truth is that firms are having problems hiring workers, which restrains economic growth.

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