Mon, July 22, 2024

Canada’s Unemployment Rate Rises to 6.2% in May

Canada

Quick Look:

  • Canada’s unemployment rate increased to 6.2%, with 27,000 new jobs added in May.
  • Higher rates contributed to a lower transition from unemployment to employment.
  • Involuntary part-time work rose to 18.2%; youth employment rates declined.

Canada’s unemployment rate in May increased slightly to 6.2%, marking a 0.1% increase from the previous month. This minor uptick was accompanied by the addition of 27,000 new jobs, signalling a mixed performance in the labour market.

The recent softening of the labour market is primarily attributed to elevated interest rates, which have pressured consumers and businesses. As a result, the transition rate from unemployment in April to employment in May fell below 25%, significantly lower than the pre-pandemic average of 31.5%. This suggests that job seekers face greater challenges securing employment than in previous years.

Canada’s Involuntary Part-Time Work Jumps to 18.2% in May

Involuntary part-time employment, where workers prefer full-time positions but cannot find them, has risen to 18.2% in May from 15.4% a year earlier. This increase reflects the broader struggles within the job market.

Youth employment has also been affected, particularly among individuals aged 20 to 2d. The employment rate for returning students in this age group dropped by 2.9% compared to last year, highlighting young adults’ difficulties in finding stable employment.

Average Hourly Wage Rises 5.1% to $34.94 in May

Despite these challenges, average hourly wages have seen a notable increase. In May, the average hourly wage rose to $34.94, a 5.1% increase from the previous year. This wage growth indicates some resilience in the earning potential for employed individuals.

Employment changes varied significantly across different sectors. Positive job growth was observed in health care and social assistance, finance, insurance, real estate, rental and leasing, business, building, other support services, and accommodation and food services. Conversely, sectors such as construction, transportation and warehousing, and utilities experienced job losses.

Bank of Canada Cuts Interest Rate to 4.75%

In response to easing inflation and a weakening economy, the Bank of Canada lowered its key interest rate by 0.25%, bringing it down to 4.75%. This decision aims to relieve the economic slowdown and potentially pave the way for further rate cuts if inflation decelerates.

Public Support for the Energy Sector Rises to 74%

A recent poll conducted by Nanos Research, in conjunction with the University of Ottawa’s Positive Energy research program, provides insights into Canadians’ views on the energy sector. The survey, carried out earlier this year, coincided with the Global Energy Show held at Calgary’s BMO Centre.

Public support for the energy sector has grown, with 74% of Canadians recognising its current importance, up from 65% in November 2020. Concerns over affordability, job security, and inflation influence this shift. Canadians are balancing their environmental aspirations with the need for economic prosperity, reflecting a duality of concerns that shape public opinion.

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