- Employment fell by 43,000 in June, fueled mainly by lower employment among workers aged 55 years and older. Despite the decline, fewer people searching for work caused the unemployment rate to drop by 0.2 percentage points, reaching a new record low of 4.9 per cent. The labour force participation rate decreased by 0.4 percentage points to 64.9 per cent.
- Lower employment in the services-producing sector outweighed growth in the goods-producing sector. The largest decline was recorded in retail trade (-58,000) with additional losses in educational services and healthcare and social assistance. Elsewhere, construction and manufacturing each posted employment increases of over 20,000.
- Across the country, employment expanded in just 3 of 10 provinces. Employment increased in Manitoba, Prince Edward Island and British Colombia. Employment declined in Newfoundland and Labrador, Quebec, Ontario and New Brunswick. Meanwhile, employment held steady in Nova Scotia, Saskatchewan and Alberta.
- Average hourly wages for all employees rose by 5.2 per cent on a year-over-year basis. While wage growth continues to trail inflation (year-over-year CPI grew by 7.7 per cent in May), the results for June are more evidence that an extremely tight labour market is causing the pace of wage growth to accelerate.
Amid tight labour market conditions, the employment rate has risen among diverse groups within the population. This includes core-aged male and female indigenous workers living off reserve as well as recently landed immigrants. Similarly, the employment rate among core-aged female workers, stood at 81.3 per cent in June, just shy of the record high recorded in the previous month. These improvements suggest that labour shortages are increasing labour market inclusivity by drawing in workers who traditionally face underemployment or lower rates of employment and labour force participation.
As interest rates rise, the prospect of an economic slowdown increases. A weakening of demand in the economy risks job losses. As monetary policy tightens, there is hope that high levels of unmet labour demand will provide a degree of cushion against a loss of economic momentum. Even if new employment opportunities are readily available, job losses that interrupt incomes are undesirable for workers, many of whom are likely to face a real wage cut this year if inflation continues to outpace wage growth.
Insolvencies among Canadian businesses are increasing. Throughout much of the pandemic, government financial support provided a lifeline to many firms, helping them to cover rent and labour costs. Without this support, and in the face of rising input prices and borrowing costs, competition among businesses is intensifying. As a result, the number of insolvencies is likely to rise further in the months ahead. Although insolvencies tend to be viewed negatively, competition is an important feature of an economy, spurring businesses to innovate and seek more efficient means of production. Competition for labour also creates the conditions required for workers to win improved pay and conditions.