Canada unemployment rate rises Canada's economy shed 17,000 jobs in May, Statistics Canada reported on Friday, in what could be an early signal the Bank of Canada’s aggressive rate hiking campaign is starting to take hold of the labour market.
The consensus expectation among economists surveyed by Bloomberg was for a 21,300 gain.
StatCan reported the job declines were concentrated in full-time work, while part-time jobs modestly increased.
The summer job market for students in particular had a major setback in May. Employment among those aged 15-24 plunged by 77,000. Meanwhile, employment for people aged 25 to 64 surged by 63,000. Historically, May is a strong month for youth employment as businesses hire students to gear up for the busy summer.
The unemployment rate rose to 5.2 per cent, marking the first increase in nine months.
Average wage growth slowed slightly to 5.1 per cent.
Total hours worked fell 0.4 per cent month-over-month, which could have negative implications for GDP.
“While most of the job losses were concentrated in the younger age cohort (15-24 year-olds), the drop in full-time jobs and reduction in hours worked point to weakness under the hood,” James Orlando, director and senior economist at TD Economics, said in a note.
“The labour market had been defying gravity for months and was bound for some giveback. Our forecast implies that the massive job gains of prior months are behind us, causing the unemployment rate to rise towards 6% by the end of this year.”
In the first quarter alone, 231,000 jobs were added, making it the best non-pandemic quarter on record, according to BMO Capital Markets.
While one month doesn’t make a trend, it’s the first sign the labour market might be easing, which is viewed by the Bank of Canada as key to slowing the overall economy.
On Wednesday, the central bank raised its benchmark rate by a quarter point to 4.75 per cent, citing the stronger-than-expected economy and the risk that inflation gets stuck above its two per cent target.
https://ca.yahoo.com/finance/news/job-market-pullback-signals-rate-hikes-may-start-bite-124120462.html