Unemployment fell to 5.1%. Canadians haven’t been so successful since 1976. On average, permanent workers are paid 3.9% more than they were a year ago and that number is only growing — it’s up 4.5% in May, one percentage point more than in April. . Currently, the densest labor markets in Canada are retail and wholesale.
Many unemployed people in Canada have recently obtained employment, which is the source of most job creations. So far, the country’s labor force has grown by only around 85,000 newcomers this year, compared to 264,000 who once had a job but became unemployed and then were recently rehired. Employment gains are now slowing as the previously bloated pool of unemployed is now reduced. Canadian industries continue to hire at a healthy pace, but this inevitable tightening of the labor market explains why many say interest rates will rise again.
Nearly 40,000 Canadian jobs were created in May, according to Statistics Canada. Economists were expecting just 27,500. These new jobs reflect a huge shift in preference for full-time versus part-time employment, which fell by 95,800 jobs. This is another sign of a tight labor market and may indicate that Canada is reaching its peak employment rate. Meanwhile, Americans saw an even better unemployment rate of 3.6% in May.
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On July 13, the Bank of Canada will decide whether to raise interest rates further to compensate for the imbalance of supply and demand in Canada. We have good things going for us, like wage gains not seen since the 90s.
The pandemic has skewed the data for a labor market already cursed with unpredictability, but February 2020 was clearly a low point for Canada. However, our economy has grown by over a million jobs in the last year alone.