Canada's unemployment rate ticks up in August: StatCan – CTV News

OTTAWA –

Canada’s unemployment rate was 5.4 per cent in August, ticking up for the first time in seven months as the economy begins to slow.

The economy lost 40,000 jobs last month, Statistics Canada reported in its latest labour force survey, with the losses concentrated in the public sector.

In July, the unemployment rate was 4.9 per cent, the lowest rate since comparable data first became available in 1976.

August marked the third consecutive month of job losses in Canada. BMO senior economist Sal Guatieri said the economy is starting to show some weakness after being remarkably strong in the first half of the year.

“The economy was doing very well up until a couple of months ago and now seems to have hit a pothole,” Guatieri said.

The report says employment gains in professional, scientific and technical services were offset by declines in education services and construction.

CIBC said the loss of 50,000 jobs in education likely represents seasonal challenges and may reverse later.

The Bank of Canada is watching for any developments in the economy as it raises interest rates to quell inflation. An economic slowdown is expected as interest rates continue to climb.

“With one more labour force survey before the (central bank’s) October meeting, it still seems likely that at least one more rate hike will be in store before a pause is seen,” CIBC senior economist Andrew Grantham said in an email.

The job losses were primarily concentrated among women aged 15 to 24 and people between the ages of 55 to 64, while the labour force participation rate held steady overall.

Average hourly wages in August rose 5.4 per cent compared with a year ago, up from year-over-year increase of 5.2 per cent in July.

Guatieri said the pace of wage growth “will raise some eyebrows” amid high inflation.

“That will make the Bank of Canada nervous about the inflation outlook, at least enough that we will see another rate increase at the end of October, probably about 50 basis points,” Guatieri said.

Statistics Canada warned that employers are likely to continue to face recruitment challenges as many Canadians reach retirement age. In August, 307,000 Canadians had left their job to retire in the last year, compared with 233,000 a year ago.

The report also looked at the unemployment rate among immigrants who arrived in Canada in the last five years. The unemployment rate for this group was 7.6 per cent, lower than any month of August since comparable data became available in 2006.

Still, it remains higher than the overall unemployment rate in Canada.

The report also found the percentage of workers looking to leave their job was on the rise. According to the federal agency, 11.9 per cent of permanent employees were planning to leave their jobs within the next twelve months, almost double the rate in January.

For low-income earners, that rate was even higher. Among workers whose average hourly wages were in the bottom 20 per cent in August, nearly one in five say they’re planning on leaving their jobs.

The labour force survey also asked workers about the job features they consider to be essential or very important. The top factor identified by respondents was salary and benefits, with 85.4 per cent of them ranking it the most important factor.

As more people head to the office, Statistics Canada said working exclusively from home was declining while the proportion of people working hybrid was rising.

This report by The Canadian Press was first published Sept. 9, 2022.

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