“We’re still dealing with the lowest unemployment rate in at least 50 years in Canada, and wages that are running strong,” Porter said. “But from a growth angle, the reality is employers are having trouble finding employees, and, so that caps the growth of the economy.”
Canada’s unemployment rate held steady at 4.9% in July, matching the record low from the month before.
The total number of unemployed people held steady at one million in July. In addition, 426,000 people wanted a job but did not look for one, and therefore did not meet the definition of unemployed. This was little changed for the sixth consecutive month. The adjusted unemployment rate—which accounts for this source of potential labour supply—remained at 6.8%, the lowest rate since comparable data first became available in 1997. In addition, employment in Canada decreased by 31,000 jobs, which according to Statistics Canada does not represent a significant change. Canada lost about 74,000 jobs from May to July, but from May 2021 to May 2022, employment increased by more than one million.
Average hourly wages for employees rose 5.2% (+$1.55 to $31.14) on a year-over-year basis in July, roughly the same year-over-year rate of increase seen in June (+5.2%; +$1.54). For a second consecutive month, average hourly wages grew at a similar pace among part-time (+5.0%; +$1.05) and full-time (+4.9%; +$1.52) employees. Earlier in 2022, wage growth had been faster among full-time employees compared to part-time workers.
The most recent inflation data indicated that the Consumer Price Index rose 8.1% on a year-over-year basis in June, the largest annual change in nearly 40 years. “Two consecutive months of lower employment indicates that the Canadian labour market is running up against capacity constraints, with little room for upside movement,” writes RBC economist Carrie Freestone in an economic update. “Demand for workers is still very high with job postings still 65% above pre-pandemic levels (though the number of job postings continues to fall), and there are few unemployed Canadians available to fill these vacant positions.”