Canada’s economy saw little change with jobs remaining relatively stagnant while the working population skyrocketed leading to higher unemployment.
Canada’s unemployment rate climbed to 6.4% in Jun., up from 6.2% in May, continuing its rise of 1.3% since Apr. 2023, according to Statistics Canada.
Despite rising unemployment, average hourly wages increased by 5.4% since last Jun.
Meanwhile, Canada’s working population grew by almost 100,000 between May and Jun. 2024.
While Canada’s working population grew by 98,700, there were 42,000 new unemployed Canadians.
Newfoundland and Labrador had the worst unemployment rate in the country in Jun., at 9.2%. The best-faring place in the country was Yukon, with an unemployment rate of 3.1%, while the province leading the way was Manitoba at 5.1% unemployment in Jun.
Prince Edward Island experienced the largest rise in unemployment, growing from 7.1% to 8%, an increase of 0.9%.
Despite having the highest unemployment rate, Newfoundland and Labrador saw the largest decrease, falling by 0.7%.
Canada’s unemployment rate also rose in May, despite adding 27,000 jobs to the economy. Canada’s working population grew by 97,600 people between Apr. and May.
May’s rise in unemployment came just after the Bank of Canada decided to lower interest rates for the first time in four years.
“We’ve come a long way in the fight against inflation. And our confidence that inflation will continue to move closer to the 2% target has increased over recent months,” said Bank of Canada Governor Tiff Macklem in May.
In a June speech to the Chamber of Commerce, Macklem said that a slowdown in hiring has led to increases in unemployment for younger workers and newcomers to Canada.
“This matters for monetary policy because it indicates there is some slack in the labour market. That suggests the economy has room to grow and add more jobs without creating new inflationary pressures,” he said.
Employment among young men aged 15 to 24 in Canada fell by 13,000 jobs, or 0.9%, in Jun.
Students on summer break were hit even harder. The employment rate for returning students aged 15 to 24 was 46.8% in Jun., down from 51.7% a year earlier, a decrease of 4.9%. This was the lowest employment rate since Jun. 1998, excluding the pandemic.
The unemployment rate among these students was 15.9%, rising 3.8% from last Jun.
In May, 18.2% of Canadians worked part-time involuntarily due to an inability to find full-time work.
Despite losing jobs in Canada, while Bloomberg expected a gain of 25,000 jobs, future rate cuts are still possible thanks to a softer labour market.
Most economists in a Bloomberg survey expect rates to hold steady before easing again in Sept.