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Canada Unemployment Rate

Canada Unemployment Rate Still The Lowest At 4.9%!

The Labour Force Survey released today, states that the Canada unemployment rate for the month of July was at 4.9%. In July, the jobless rate remained unchanged matching the historic low set in June 2022.

The adjusted unemployment rate, which takes into account those who wished to work but were not in the labour force, remained at 6.8% in July, also matching a record low. Employees’ average hourly salaries increased 5.2 percent (+$1.55 to $31.14) in July over the same month last year, reflecting the rate of wage growth seen in June.

While employment in all other provinces remained largely unchanged, there were fewer persons working in Ontario and Prince Edward Island. After rising by 1.3 percent in June, the overall number of hours worked decreased by 0.5 percent in July. Total hours worked in July were down 1.5% from a recent peak in March 2022.

At the industry level, a decrease in the sector that produces services was countered by a rise in the sector that produces goods. A rise in the number of independent contractors helped to moderate a decline in public sector employment.

For the third month in a row, long-term unemployment decreased, falling 23,000 (-12.2%) to 162,000 in July. While older men saw an increase in employment, older women’s employment fell.

Canada Labour Shortage

In June and July, as Canada experienced its sixth COVID-19 wave, various hospitals across the nation reported that staff COVID-19 infections and labour shortages had forced them to cut back on some services, including temporarily closing some emergency departments.

The pandemic has undoubtedly created a record-tight labour market throughout the world. However, despite the market conditions, the unemployment-to-job vacancy ratio in Canada is at a historical low. All provinces have seen a decrease in the unemployment-to-job vacancy ratio. But Quebec and British Columbia have had the lowest ratio.

These labour challenges have impacted employers throughout Canada. Employers are having a difficult time filling job positions. Also, the industries that are most implicated by the shortage are- construction, food accommodation, and manufacturing.

At the industry level, there is a decline in the services-producing sector. This has been offset by an increase in the goods-producing sector. In the services-producing sector, employment fell by 53,000 (-0.3%) in July. The losses are spread across several industries, including retail trade, health care and educational services. However, employment in the goods-producing sector has risen (+23,000; +0.6%) in July.

The number of public sector employees fell by 51,000 (-1.2%) in July, while the number of self-employed workers increased by 34,000 (+1.3%). The number of private sector employees was little changed.

Reasons for the Labour shortage

During the pandemic, the number of retirements and people quitting jobs due to dissatisfaction had dropped significantly. However, as the labour market started recovering, the number of people who quit their jobs is returning to pre-pandemic levels.

These developments have created labour shortages throughout Canada, especially among skilled workers. Thus, Canada will need to rely on immigration and other sources for labour force growth

Also, a mismatch between the wages offered with vacancies and the reservation wage is a reason for the labour shortage. So, what this means is that the minimum wage that job seekers need to accept a position is also responsible for the shortage. This is especially true when it comes to retail trade, accommodation, and food services.

However, when it comes to jobs where the wage offered is above the reservation wage, like health care and social assistance, there are various other factors that have led to the shortage. These could be population, aging, and so on. 

So, if you are someone who is looking for a job, this is definitely good news for you! Finding a perfect job in Canada has never been easier. 

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