The Labour Market Is Slowing in Quebec and Ontario
- Quebec shed 8,500 jobs in July, mirroring June’s losses. It was the fourth decline in six months.
- The unemployment rate inched further away from January’s record low of 3.9%, rising from 4.4% in June to 4.5%.
- In Ontario, employment fell by 2,000 in July after an impressive 55,800 gain in June. The unemployment rate edged down from 5.7% to 5.6%.
- Year-over-year, average hourly wage growth continued to slow in Quebec, coming in at 2.8% in July—the smallest increase since January 2022.
- In Ontario, it came in at 5.7%, even stronger than the 3.7% advance in June.
We’ve been expecting Quebec's labour market to soften. The economy has been showing several signs of weakness, and hiring has been up and down in recent months. The unemployment rate also continues to climb as we predicted. The labour market seems to have rolled over sooner in Quebec than in several other Canadian provinces, especially Ontario. At the same time, wage growth is cooling in Quebec and the job vacancy rate continues to fall from its early 2022 peak.
The slight drop-off in employment in Ontario isn’t cause for concern. The province has posted big gains this year, and July's decline doesn’t necessarily signal a shift. Most other economic indicators are holding up, and the first quarter was particularly strong. Real GDP grew at an annualized 4.0% in the first quarter in Ontario compared to 1.7% in Quebec. It seems Ontario’s economy still has fuel in the tank, driven by robust population growth and the post-pandemic rebound in auto production. Wages are rising again, suggesting a still-tight labour market.
July's jobs report is another sign of weakness for Quebec's economy. Meanwhile employment was flat in Ontario after blockbuster job creation in June. We don’t think this signals a rollover yet, however. It could take a few more months before the province’s labour market starts to soften.
Contact our economists
Elsewhere in Canada:
1-866-866-7000 This link will launch your default phone software.