Canada’s unemployment rate hits 7-year high in August
Statistics Canada said Friday that the unemployment rate rose to 6.6 per cent amid a gain of 22,000 net jobs. The increase reflected gains in part-time work but declines in full-time jobs.
Canada's unemployment rate rose again in August as the labor market continued to cool.
Statistics Canada reported on Friday that the unemployment rate increased to 6.6 percent, with a net gain of 22,000 jobs. This rise was driven by growth in part-time employment, while full-time positions saw a decline.
The rate, up from 6.4 percent in July when the economy lost a few thousand jobs, is now at its highest level since May 2017, excluding the pandemic years, according to StatCan.
Despite ongoing job creation, Canada’s unemployment rate has been climbing, largely due to rapid population growth expanding the labor force.
StatCan highlighted that students had a particularly challenging summer job market. The unemployment rate for students returning to school in the fall reached 16.7 percent, the highest since 2012, excluding the pandemic.
In August, the health care and social assistance sector continued its growth, adding 157,000 jobs over the past year, accounting for nearly half of the country's total job growth during that time.
The educational services sector also saw job gains in August, while sectors like professional, scientific, and technical services, along with “other services” (including personal and repair work), experienced job losses.
Average hourly wages increased by 5.0 percent in August, a slight decrease from the 5.2 percent rise seen the previous month, according to the agency.
This latest snapshot of Canada's labor market comes two days after the Bank of Canada implemented its third consecutive interest rate cut, aimed at reducing borrowing costs to alleviate pressure on the economy.
In the U.S., new labor data released on Friday arrives just weeks before the U.S. Federal Reserve is expected to begin its own easing cycle. Employers added 142,000 jobs in August, up from the modest 89,000 in July, according to the U.S. Labor Department. The U.S. unemployment rate fell to 4.2 percent from July's 4.3 percent, which had been the highest in nearly three years.
The mixed jobs report raises questions about the size of the Fed's upcoming interest rate cut after its September 17-18 meeting. The central bank may opt for a standard quarter-point reduction or a larger half-point cut. Wall Street traders currently see roughly a 50-50 chance of either outcome, based on futures prices.
