The Canadian unemployment rate increased to seven percent in May, the highest in nine years out of the pandemic, Statistics Canada said Friday.
In its latest workforce survey, the data agency says that the unemployment rate has increased to its highest level since 2016, with the exception of the high unemployment rates observed during 2020 and 2021.
There have been “practically no employment growth” since January after strong profits in autumn, added Statistics Canada. The economy added only 8,800 jobs during the month, showing few changes as of April.
The number of employees hired in the private sector increased in May for the first time since the beginning of the year, and the use of the public sector fell due to the end of the federal electoral period, which increased seasonal hiring.
A 58,000 gain in full -time positions was compensated for the loss of 49,000 part -time positions. The wholesale and retail trade led the way in labor profits, adding 42,800 positions, while the information, culture and recreation sector won 19,300.
The public administration sector lost 32,200 jobs. The manufacture, one of the most vulnerable sectors to losses of job -related jobs, throws 12,200 additional jobs in May after losing 31,000 roles in April.
“In general, our classification gives this report an approval rating, largely due to force in the private sector and full -time works, but the persistent increase in the unemployment rate is a strong warning warning,” wrote Douglas Porter, chief economist of BMO.
“The main point is that Slack is still growing in the labor market, which suggests that the Bank of Canada still cannot finish the fees.”
The next interest rate decision of the Central Bank is July 30.
People who have more difficulty finding work
In general, there were 1.6 million unemployed people in Canada in May, an increase of 13.8 percent with respect to the same period last year, according to the data agency.
A smaller part of people who were unemployed in April, when the unemployment rate stood at 6.9 percent, found work in May compared to the same period in other comparable years.
“This indicates that people face greater difficulties in finding work in the current labor market,” said the agency.
Porter, in his client note, observed that “we have gone from a situation in 2022 and 2023 when it was difficult to find workers to, today, when it is difficult to find work.”
Unemployed people also spent more time looking for work, 21.8 weeks, or approximately five months, compared to the previous year, when the average was 18.4 weeks.
Meanwhile, young people face a challenging start for the summer labor market. The unemployment rate for students returning to school in autumn also saw an increase year after year to 20.1 percent, increasing 3.2 percent in May.
The average wages per hour grew by 3.4 percent (increasing $ 1.20 to $ 36.14) compared to the same period last year, coinciding with the growth rate seen in April.
