Canada’s unemployment rate remained historically low at 4.9 percent in July, and remained unchanged from June as the country still faces a labor shortage.
In its latest workforce survey, Statistics Canada said the economy lost 31,000 jobs, the second consecutive month of job losses.
The number of public sector employees decreased, while the number of self-employed workers increased. There was little change in the number of workers in the private sector.
The Canadian job market remains exceptionally tight, with over a million job vacancies across the country. The unemployment rate is the lowest on record with comparable data going back to 1976.
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“The most important thing for Canadians to bear in mind is the confirmation of today’s unemployment rate of 4.9 per cent, which is a historic low for Canada and this is good news for Canadians,” said Chrystia Freeland, Canadian Deputy Prime Minister and Minister of Finance. in Nova Scotia Friday.
“The biggest economic challenge we face when it comes to the labor market is the shortage of workers.”
Statistics Canada says that despite the labor shortage, there is no evidence of a high percentage of people leaving or changing jobs.
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Andrew Grantham, chief economist at CIBC, noted that July job losses were concentrated in the services sector, including wholesale and retail trade, education and health in a Friday morning note.
“With vacancy rates on the rise in some of these sectors, it appears that labor supply rather than demand is the main issue,” Grantham said.
The labor participation rate for Canadians aged 25-54 is relatively unchanged from what it was before the pandemic.
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The pace of wage growth also remained flat compared to June, with average hourly earnings rising 5.2 percent year-on-year.
Statistics Canada’s report also addressed the persistent shortage of health care workers, with a focus on nurses. According to Statistics Canada, more than one in five nurses worked overtime with pay in July, the highest level since comparable data became available in 1997.
For comparison, about 10 percent of all other employees worked overtime in July.
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As Canada faced its seventh wave of COVID-19 infections, 11.2 percent of nurses had contracted the disease for at least part of the week when the workforce survey was conducted.
The Bank of Canada is paying close attention to employment levels in the country as it prepares to announce its next major interest rate in September, when it is expected to raise rates again.
As the country’s economic growth slows as the central bank attempts to tame inflation with higher interest rates, economists note that a tight labor market makes the slowdown unique in nature.
US unemployment drops to 3.5%
Meanwhile, America’s employment boom continued last month as employers added a surprising 528,000 jobs despite hyperinflation and growing concern about a recession.
Employment rose in July from 398,000 in June. The unemployment rate fell to 3.5 percent.
The US economy contracted in the first two quarters of 2022 – an unofficial definition of a recession. But most economists believe that a strong job market has prevented the economy from sliding into deflation.
He has defied the skeptical American labor market time and time again this year. Economists expected only 250,000 new jobs this month.
– With files from The Associated Press and Global News
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