Despite the overall employment rate in Canada remaining relatively stable, Statistics Canada’s recent report reveals that the country lost 17,000 jobs in May, resulting in an increase in the unemployment rate to 5.2 percent. The most significant decline was seen among young individuals aged 15 to 24, with a loss of 77,000 jobs. In contrast, the age group of 25 to 54 experienced a gain of 63,000 jobs, predominantly among men who accounted for two-thirds of the growth.
While the overall employment rate remained relatively unchanged, the decline in job numbers is a concern, particularly for the youngest age group. It is worth noting that Canada had been experiencing job gains since September 2022 until January 2023, making this the first instance of job loss since August 2022.
On a positive note, average wages saw a year-over-year increase of 5.1 percent, reaching $33.25 per hour. This consistent rise in wages, outpacing inflation for the fourth consecutive month, indicates a positive trend in terms of compensation for workers.
The sectors hit hardest by job losses in May were business, building, and other support services, which experienced a decline of 31,000 jobs or a 4.4 percent decrease overall. Additionally, there were 40,000 fewer self-employed individuals during this period.
The impact on young people seeking employment is particularly evident. Shaziah Jinnah Morsette, president of the University of Calgary Students’ Union, highlights the struggle faced by students in finding full-time work during the summer, which has a direct impact on their ability to cover living expenses and tuition fees. The changing landscape and increased competition for limited job opportunities hinder students from gaining skills relevant to their chosen fields.
Despite the decline in jobs and concerns over youth unemployment, economists like Dawn Desjardins, chief economist at Deloitte, urge caution, emphasizing the volatility of these numbers. They believe that the current situation should not be perceived as overly dire and should not immediately raise alarm bells.
However, Alberta’s youth unemployment rate of 11.3 percent in May remains a concern, double the province’s overall unemployment rate of 5.7 percent.
While certain industries, such as accommodation and food services, experienced job growth in May, the hiring process comes with its own set of challenges, including finding qualified candidates and providing necessary training.
Given the rise in overall unemployment, analysts are uncertain about future interest rate hikes by the Bank of Canada. The upcoming months will be crucial in determining if this trend continues or if the job market experiences a rebound.
Author: IBC Global Times
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