Canada: Labour Market Stalls, but Inflationary Drivers Persist

Summary of the publication

Net total Canadian employment fell by 30.6k jobs in July 2022, for the second consecutive monthly decline.

That trend was roughly evenly split between part-time (-17.5k) and full-time (-13.1k) employment.

Job losses were concentrated in the services sector (-53k), particularly in wholesale and retail trade and the public sector. The goods-producing sector gained about 23k net new positions.

The unemployment rate remained at 4.9%—still among the lowest ever recorded—as the participation rate declined 0.2 ppts to 64.7%. The participation rate is now 0.7 ppts below its March 2022 post-pandemic peak.

Total hours worked fell by 0.5%, the third decline in four months to sit 1.5% below the March 2022 peak.

Gains in hourly earnings of permanent employees—monitored by the Bank of Canada in its assessment of wages’ impacts on inflation—slowed to 5.4% y/y in July but is still one of the fastest readings ever outside the temporary pandemic-induced boost in spring 2020.

Half the provinces experienced net total employment losses, with the largest in Ontario (-27.4k), Quebec (-4.5k) and Prince Edward Island (-2.3k).