Unemployment Rate Remains at Record Lows, Wage Growth Surges: Labour Force Survey

According to data provided by Statistics Canada, there was little change in employment for the third consecutive month in July, while the unemployment rate increased by 0.2 percentage points to 5.7 per cent as more people searched for work.

The data reveals employment growth of 353,000 (+1.9 per cent), compared with July 2018.

Though employment decreased in Alberta, Nova Scotia and New Brunswick, it increased in Québec and Prince Edward Island, and held steady in the other provinces.

“24,200 fewer jobs for the month and weak labour force growth meant the unemployment rate ticked up slightly in July.  However, the decline should be taken in the context of Canada’s phenomenal labour market performance over the past 7 months,” said Cory Renner, an economist at the Conference Board of Canada. “Even still, two straight month of jobs declines suggests Canada’s labour force is losing some steam. On the positive side of things, year-over-year wage growth rose to a ten-year high.”

Statistics Canada reports that there were both fewer full-time jobs (-11,600) and fewer part-time jobs (-12,600) in July.

Despite a 16,600 job increase in Québec, the rest of the country fared much worse with Alberta seeing the largest decline (-14,300). Ontario (-10,700) and British Columbia (-4,800) also saw notable weakness this month.

Private sector jobs declined by 69,300 in July, the largest decline since 2009, and the labour force grew by 11,200.

Population growth (+55,400) outpaced the gains in the labour force causing the labour force participation rate to decline slightly in July.

The unemployment rate edged up to 5.7 per cent, which is the highest reading since April according to the report.

Year-over-year growth in average hourly wages rose to 4.5 per cent in July compared to a year prior.  This is the highest year-over-year gain since early 2009.

Wage growth improved for both goods-producing industries (+4.1 per cent year-over-year in July compared to +3.6 per cent in June) and services-producing industries (+4.8 per cent in July compared to +3.8 per cent in June).

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