That’s up from 4.9% in July, the lowest unemployment rate since comparable data first became available in 1976.
BMO senior economist Sal Guatieri said the economy is starting to show some weakness after remarkable strength 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.
Overall, the Canadian economy lost 40,000 jobs last month in August, with the losses concentrated in the public sector. August also marked the third consecutive month of declines, with a total of 114,000 jobs lost over that time period.
The report says employment gains in professional, scientific and technical services were offset by declines in education services and construction.
However, 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. Earlier this week, the central bank hiked its benchmark interest rate by three-quarters of a percentage point, bringing it to 3.25%.
An economic slowdown is expected as interest rates continue to climb, but the bank has said inflation is still too high for the cycle of rate hikes to end.
“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 in August 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 the year-over-year increase of 5.2% 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,” Guatieri said, suggesting it could be a half-percentage-point hike.
HSBC chief economist David Watt said looking beyond the headline job numbers shows some “quirks” in the labour market. A closer look at wage growth and employment among 25- to 54-year-olds suggests the labour market is still tight, he said.
“This underlying story still suggests that there’s a lot of underlying strength and momentum in the parts of the labour market that are going to be most important to the Bank of Canada,” Watt 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%, lower than any 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% of permanent employees were planning to leave their jobs within the next 12 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% 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% 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.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
