Economy lost 43,000 jobs in June, unemployment rate falls to 4.9%

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OTTAWA — The Canadian economy shed 43,000 jobs in June, marking the first decline in employment since January.

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Meanwhile, the jobless rate fell to another record low of 4.9%, according to Statistics Canada’s latest labor force survey on Friday.

The unemployment rate in May was 5.1%, the lowest rate since at least 1976, which goes back to comparable data.

The agency attributed the drop in the unemployment rate to fewer people looking for work, while the job loss was driven by a drop in self-employment of 59,000 jobs.

Employment in the public and private sectors remained stable.

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As expected by economists, wages rose at a faster pace, with the average hourly wage rising 5.2% to $31.24 year-over-year.

Compared to pre-pandemic wage growth, June recorded the fastest growth since comparable data was collected in 1998. However, wage growth in June was still below the most recent inflation rate of 7, 7% reported in May.

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Wage growth was led by gains among non-unionized workers, who saw their wages increase by 6.1%, while unionized workers saw a slower increase of 3.7%.

Employment in the service sector fell by 76,000, erasing gains made earlier in the years. The largest decline in employment was observed in retail trade. The report said data from the next few months could help determine whether the decline was due to changing consumer behaviors as inflation remains elevated.

Employment in the goods-producing sector rebounded, with 33,000 jobs added.

With a 1.3% increase in hours worked and falling jobs offset by a decline in labor force participation, CIBC chief economist Avery Shenfeld said the Bank of Canada would not be deterred from raising interest rates more aggressively.

“By itself, the overall decline in employment is not yet compelling evidence of a slowdown that will dissuade the Bank of Canada from a 75 basis point hike next week,” Shenfeld said in an email.


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