Unemployment Rate in Canada Soars to 6.4%

The Canadian statistical agency reported that the Canadian economy lost 1,400 jobs last month, causing the unemployment rate to rise by 0.2% to 6.4%. Only one out of five unemployed individuals in May managed to find employment in June, a rate significantly lower than pre-pandemic averages.

The agency also noted that the unemployment rate has been steadily rising for over a year, reaching 1.4 million people unemployed in June. Specifically, unemployment among Black Canadians aged 24 to 54 stood at 11.9%, marking a 4.4% increase compared to the same period last year. Additionally, the unemployment rate among South Asian Canadians reached 6.7% in June, up 1.7% from the previous year.

The economist at BMO, Douglas Porter, wrote in a note the following: “This report drives home the point that the Canadian labour market can simply no longer be considered tight — in fact, it is quickly tipping in the other direction.”

Porter also mentioned that the weakness in the labor market increases the likelihood of the Bank of Canada reducing interest rates, although the central bank has been closely monitoring wage increases and will pause on this issue.

He further added that it is painful to see the youth unemployment rate, aged 15 to 24, rise from 0.9% to 13.5%, the highest unemployment rate Canada has seen since 2014, excluding the pandemic years of 2020 and 2021.

Finally, the report concluded that the average hourly wages in Canada increased by 5.4% in June.

Edmonton

Edmonton