June 15, 2023
The Canadian labour market is finally cooling off, at least a bit, raising questions of whether the Bank of Canada acted too hastily in raising interest rates this week.
In its Labour Force Survey released Friday morning, Statistics Canada said 17,000 jobs were lost in May, the first time in nine months there was a net job loss. The unemployment rate rose for the first time since last August, to 5.2 per cent.
The drop was driven largely by a fall in youth employment, as 77,000 people between the ages of 15 and 24 lost their jobs.
A consensus of economists surveyed by Bloomberg had forecast the economy added 20,000 jobs.
The lacklustre jobs report raised questions over whether the Bank of Canada may have acted too quickly in raising interest rates Wednesday, some economists suggested.
The Bank of Canada cited continuing strength in the labour market in announcing its decision to raise its key overnight lending rate by 25 basis points — a quarter of a percentage point — to 4.75 per cent.
