Employment fell by 43,000 in June in Canada. This is the first decline in employment since January 2022, according to data released Friday by Statistics Canada.
Updated yesterday at 4:04 p.m.
Despite this decline in employment, the unemployment rate fell by two tenths of a point to settle at a new record low of 4.9%, for the fourth month in a row.
In Quebec, employment fell by 27,000 in June, the second decline in three months.
Despite this decline in the number of people employed, the unemployment rate in Quebec changed little, standing at 4.3%. It continues to oscillate around a record low.
The most marked employment declines in Quebec occurred in the natural resources sector as well as in computer technologies, culture and recreation.
In the Montreal metropolitan area, both the number of jobs and the unemployment rate – at 4.7% – changed little in June.
“A decline in employment was inevitable at some point. But it arrived a little earlier than expected, especially in sectors that had seen a favorable wind since the reopening of the economy, says Randall Bartlett, senior director of analysis of the Canadian economy at Desjardins.
“However, regardless of the monthly change in employment, the labor market remains extremely tight, as evidenced by the unemployment rate at a record low and the acceleration in wages. »
Wage inflation
Statistics Canada reports that the average hourly wage rose 5.2% year on year, to $31.24 in June. This is a significant acceleration from the 3.9% year-on-year increase seen in May, and the 3.3% measured in April.
“The acceleration of the average hourly wage to 5.2% over one year is the fastest pace ever recorded, if we exclude the pandemic during which a massive number of low earners lost their jobs, reports Matthieu Arseneau , Deputy Chief Economist at the National Bank.
“This result continues to show strong demand for new workers, which is contributing to wage pressures. For this reason, the Bank of Canada must continue to calm demand by rapidly raising interest rates. So I expect a 75 basis point hike [0,75 %] starting next week,” anticipates Mr. Arseneau.
With this tightening, companies will realize that their labor needs may not be as high as they anticipated, and they will stop bidding to attract employees.
Matthieu Arseneau, Deputy Chief Economist at National Bank
At the Royal Bank, Deputy Chief Economist Nathan Janzen also notes that “the rise in wages in June will only add to the Bank of Canada’s concerns that high inflation will not come down sufficiently without new aggressive interest rate hikes”.
“It will help calm inflationary pressures,” anticipates Mr. Janzen. But it also means that the labor market could ease over the next few months, and then head for a more significant rise in the unemployment rate next year. »
Age groups
Among other employment data in June, Statistics Canada reports that the unemployment rate for people aged 25 to 54 fell 0.2 percentage points to 4.1%, representing a new record low.
Among youth aged 15 to 24, the unemployment rate fell 0.6 percentage points to 9.2%.
Among men aged 55 and over, the unemployment rate of 5.2% was little changed in June.
But among women aged 55 and over, for the eighth consecutive month, the unemployment rate fell 0.5 percentage points to 3.6% in June.
