Employment rose by 40,000 (+0.2%) in August. This increase in employment was outpaced by population growth (+103,000; +0.3%) and the employment rate—the proportion of the population aged 15 and older who are employed—fell 0.1 percentage points to 61.9%, reported Statistics Canada on Friday.
Alexander Suhorucov
The unemployment rate was unchanged at 5.5%, following three consecutive monthly increases in May, June and July, added the federal agency.
“Employment increased among core-aged men (+33,000; +0.5%) and women (+21,000; +0.3%) aged 25 to 54 years, while employment declined among women aged 55 and older (-27,000; -1.3%). Employment for female youth increased (+32,000; +2.4%), while it declined among male youth (-29,000; -2.1%),” it said.
“Employment increased in professional, scientific and technical services (+52,000; +2.8%) and construction (+34,000; +2.2%) and declined in educational services (-44,000; -2.9%) and manufacturing (-30,000; -1.6%). Employment changes in the other industries were smaller.
“Employment rose in Alberta (+18,000; +0.7%), British Columbia (+12,000; +0.4%), and Prince Edward Island (+1,800; +2.0%) in August, while it declined in Nova Scotia (-3,600; -0.7%).
“The number of self-employed workers rose by 50,000 (+1.9%) in August, the first notable increase in nine months. There was little change in the number of employees in the private sector or in the public sector.
“On a year-over-year basis, average hourly wages rose 4.9% (+$1.56 to $33.47) in August, following an increase of 5.0% in July. Total hours worked were up by 0.5% in August and by 2.6% on a year-over-year basis.”
“While the positive job gain provided an offset to weakness in prior months, the population boom (+103k!) is causing labour force growth (+54k) to outpace hiring. The number of unemployed workers has now grown by 137.6k over 2023. As we highlighted in our recent job market outlook, there are many ways the once high-flying labour market can come back down to earth. So far, it has been a smooth transition. But this will be no easy task, and we expect turbulence in the months ahead,” he said.”Bank of Canada Governor Tiff Macklem spoke yesterday about the clear evidence that past interest rate hikes are working to slow the economy. While the evidence became a little less clear today, when we look under the surface, the story still holds. Consumer spending is slowing under the weight of 475bps in rate hikes over the last 18 months, and the real estate market is rolling over again after the BoC’s June/July rate hikes. Given that markets are pricing a 50/50 chance of another BoC hike this year, it is clear that market participants are still looking for more evidence of an economic slowdown.”
Douglas Porter, Chief Economist with BMO Economics, said Canada’s job market has been following a sawtooth pattern this year, with a soft report generally followed by a snapback, and this was the month for a minor snapback.
“While August was for the most part a respectable month, it’s worth pounding home the point that Canada now needs a steady flow of jobs just to match raging population growth—StatCan says about 50,000 jobs are needed a month to hold the unemployment rate steady. Thus, it’s not inconsistent to see a sturdy monthly gain of 40,000 jobs and still conclude that the market is slightly easing. For the Bank of Canada, this report therefore likely doesn’t move the needle much—it’s not strong enough to prompt an immediate rethink on the pause, but it’s also certainly not soft enough to rule out further hikes. The next decision will largely hinge on how the CPI fares in the next two readings,” he said.
Nathan Janzen, Assistant Chief Economist with the Royal Bank of Canada, said employment is still rising, but so is the unemployment rate with job demand no longer strong enough to keep up with a rising supply of workers from surging population growth.
“The Bank of Canada will continue to watch wage growth (still well-above pre-pandemic levels) closely and is clearly willing willing to re-start rate hikes again if inflation doesn’t slow and broader economic conditions don’t soften further. But the central bank’s move to leave the overnight rate unchanged earlier this week was based on signs that the balance of labour supply and demand was improving – and the unemployment rate holding steady after three months of increases is still likely consistent with that view for now,” he said.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)
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