July 12, 2023
The Canadian labour market is showing some signs of softening as the unemployment rate rises and wage growth slows, but with another solid job gain last month, forecasters are still expecting a rate hike next week.
Statistics Canada reported Friday the economy added 60,000 jobs in June, far more than was estimated by economists and driven by gains in full-time work.
But as more people searched for work and the population continued to grow, the unemployment rate rose to 5.4 per cent — the highest it’s been in over a year.
That’s up from 5.2 per cent in May, marking the second month in a row the unemployment rate has risen as economists watch for softening in the labour market amid high interest rates.
“The rapidly growing labour force, which was also helped along by a rise in participation, will further ease some of the labour shortages reported by employers,” wrote Desjardins economist Royce Mendes in a note.
Population growth will also mean additional demand for goods and services “in an economy that’s already running too hot,” he said. “But on the whole, this was a very strong labour market update.”
