According to Statistics Canada, the country’s economy recorded a little rise in employment last month. This reversed some of the previous losses in the past months. However, the country’s labor market remains tight as they weather the economic crisis.
Unemployment Rate In Canada Dropped To 5.2% In September
On Friday, Statistics Canada released its labor force report. The report noted that the unemployment rate for September was 5.2%. This is lower than the rate in August, which was 5.4%.
Meanwhile, over 21,000 jobs were created last month. This increase in the employment rate did not come as a surprise due to the resumption of schools.
When schools reopened, the employment rate reversed the job losses recorded in the summer. Additionally, the report revealed employment gains in other sectors like social assistance and health care.
Unfortunately, job losses in other sectors offset the gains. These sectors include recreation, culture, information, and manufacturing.
Furthermore, the labor force participation rate in Canada dropped slightly by about 0.1% last month. This rate is the percentage of individuals who are looking for jobs.
Meanwhile, the recent increase in employment comes after just three months of high job losses in Canada. James Orlando, TD’s director of economics, said the labor market remains very tight.
Orlando said there are several job vacancies available. Moreover, there is a supply-demand imbalance in the labor market.
Wages Increased In September By Over 5%
According to the director, the country’s central bank has been hiking interest rates recently. Hence, it is only normal for the effects of such increases to reflect in employment numbers and economic growth.
The central bank even blamed the tight nature of the labor market for the high inflation rate. Orlando argued that the country still has a long way to go before the country can fix the situation.
From March till now, the central bank has hiked interest rates from about 0.25% to 3.25%. This is among the fastest increments recorded in the history of the country.
However, inflation is still above the bank’s 2% target. So, many experts believe the bank will increase interest rates again when it meets with other agencies on October 26th.
Meanwhile, more sectors in the nation’s economy feel the effects of high-interest rates. Hence, analysts predict that the unemployment rate may jump to 5.6% soon and peak at 6.5%.
Friday’s news also revealed that wages have grown in the country at a slower pace than living costs. Last month, wages increased by 5.2% compared to last year. This marked the fourth consecutive month that wages increased by about 5%.