Money

Money

Canada’s Unemployment Rate Just Hit a Record Low

Published:

Canada’s unemployment rate continued to fall in June, hitting a record low of 4.9% as fewer people searched for work.

The new numbers from Statistics Canada, released on Friday, revealed this drop, marking the fourth consecutive record low for the country’s unemployment rate. June’s adjusted unemployment rate, which includes people who were not in the labour force but wanted to work, fell 0.2% to 6.8% — the second consecutive record low.

Interestingly, Canada’s employment rate also fell in June, dropping by 0.2% — the first such decline seen since January of this year. The losses, Statistics Canada says, were “almost entirely due to a decrease among workers aged 55 and older.” This is the first decline among older workers since April 2021, and was largely seen among men aged 55 to 64. In fact, the new data found that workers over the age of 60 are more likely to work by necessity rather than by choice.

For those aged 25 to 54, employment levels were little changed among both men and women, remaining at or just below the record highs seen during the spring. Even for workers aged 15 to 24, the employment rate did not change, remaining close to the pre-pandemic high recorded in April 2019. Student employment continues to sit above pre-pandemic levels, with Statistics Canada stating that “a notable part of this increase is attributable to female students aged 20 to 24, more than three-quarters of whom were employed in June.”

The level of full-time work slid up, rising by 0.8% in June, while involuntary part-time work — the rate of part-time workers who cannot find full-time jobs — continued to drop, reaching a new record low of 14% in June. Before the pandemic, in February 2020, this rate was 19.4%.

Self-employment rates also declined in June, falling by 59,000 workers, or 2.2%, erasing most of the growth in self-employment seen since October 2021. This also pushed the number of self-employed workers below pre-COVID levels.

“In the same way that employees may leave their job to start a business, every month some self-employed workers find work as employees,” the Statistics Canada report reads. “In the context of high job vacancies and accelerating wage growth, 5.0% of people who were self-employed in May became employees in June.”

Long-term unemployment, categorized as people who have been continuously unemployed for 27 weeks or more, fell by a significant 11.3% from May to June. Of the people in this group, 21.3% stopped looking for work while 9.4% became employed.

As for what areas jobs are being found and lost in, employment rates in the services-producing sector fell by 0.5% in June while gains were seen in the good-producing sector. The number of people working in construction grew by 1.5%, with Ontario accounting for the vast majority of that increase. The construction jump, which totaled 23,000 new workers, recouped losses seen in the previous two months. On a year-over-year basis construction employment has grown faster than most other industries, sitting 8% above the same time last year.

With rapidly growing inflation and labour shortages forcing companies to make their job openings more appealing, wage growth continues to accelerate. Average hourly wages for employees rose 5.2% year over year to $31.24. These increases were largely led by non-unionized employees with their wages increasing 6.1% compared to unionized workers’ 3.7%.

“The extent to which individual employees see their wages increase is influenced by a wide range of factors, including whether or not they are covered by a collective bargaining agreement or a union contract,” the report reads. “While having union coverage can increase employees’ ability to negotiate larger wage increases, these increases can be delayed until collective agreements expire and a new round of collective bargaining begins.”

Never Miss the Next Big Story

Stay in the loop with STOREYS' weekly newsletter.

You may also like

[class^="wpforms-"]
[class^="wpforms-"]