Employment Drops for Third Consecutive Month in August;
Labour Demand Persists
Labour market continues to soften. Canada’s unemployment rate increased by 50 basis points to 5.4 per cent. This is still slightly below the pre-pandemic level of 5.6 per cent seen in January 2020, however, it appears the labour market is beginning to cool. This was primarily driven by the 40,000 jobs lost in August, which were mostly in the public sector, as well as the construction industry. This suggests higher interest rates may be impacting development activity, especially in the residential housing sector. Nonetheless, these losses were partially offset by the rise in professional service employment, despite widespread tech layoffs, as well as an increase in financial services and real estate employment. Furthermore, Canada is beginning to see an uptick in immigration, causing the country’s participation rate to rise, and ultimately the unemployment rate, as it takes time to find jobs. However, immigration only has a marginally impact on unemployment, and the main driver is the significant job loss seen within the public sector and construction industry.