Ottawa’s unemployment rate remains low, public service sees decline

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Ottawa’s unemployment rate fell to 3.5% in July, one of the lowest rates in the country, despite a drop in the number of public service employees.

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In its latest labor force survey, Statistics Canada said there were 51,000 fewer employees in the public sector in July, the first decline in this sector in a year. The decline was largely concentrated in Ontario and Quebec. Year over year, public sector employment increased 5.3%.

Canada’s unemployment rate remained at a historic low of 4.9%, unchanged from June, as the country continues to face a labor shortage.

The economy lost 31,000 jobs, marking the second consecutive month of job losses.

The number of self-employed increased by 34,000 last month. The number of workers in the private sector changed little.

The Canadian labor market remains exceptionally tight, with more than one million vacancies across the country. The unemployment rate is the lowest on record with comparable data dating back to 1976.

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According to Statistics Canada, despite the labor shortage, there is no evidence of an increase in the proportion of people leaving or changing jobs.

CIBC senior economist Andrew Grantham noted July’s job losses were concentrated in the services sector, including wholesale and retail trade, education and health care in a note Friday morning .

“With some of these sectors showing high vacancy rates, labor supply rather than demand appears to be the main issue,” Grantham said.

The participation rate of Canadians aged 25 to 54 is relatively unchanged from what it was before the pandemic.

The pace of wage growth was also flat from June, with average hourly earnings rising 5.2% year over year.

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The Statistics Canada report also looked at the continuing shortage of health care workers, with a focus on nurses. According to Statistics Canada, more than one in five nurses worked paid overtime in July, the highest level since comparable data became available in 1997.

By comparison, about 10% of all other employees worked overtime in July.

As Canada faced the seventh wave of COVID-19 infections, 11.2% of nurses were on sick leave for at least part of the week when the Labor Force Survey was conducted.

The Bank of Canada is paying close attention to employment levels across the country as it prepares to make its next key interest rate announcement in September, when it is expected to raise interest rates once again. .

As economic growth slows in the country as the central bank attempts to rein in inflation with higher interest rates, economists have noted that the tight labor market makes the slowdown unique in its nature.

With files from The Canadian Press