Canada’s Unemployment Rate Surprisingly Drops
Canada’s unemployment rate has surprisingly dropped to 6.9% in June, with the economy adding 83,100 new jobs, according to data from Statistics Canada. This increase in employment was seen mainly in wholesale and retail trade, as well as in healthcare and social assistance.
Employment Growth
Most of the employment growth was in part-time work, with around 33,600 new jobs added in wholesale and retail trade, and 16,700 in healthcare and social assistance. However, the agriculture sector shed 6,000 people in June. The number of unemployed Canadians hardly changed from May, but it was up 9% to 128,000 on a year-over-year basis.
Impact on the Economy
The better-than-expected unemployment and job addition numbers are likely to influence the Bank of Canada’s monetary policy decision on July 30. The Canadian dollar was trading down 0.12% to 1.3671 to the U.S. dollar, and bond yields on the two-year government bonds were up 1.9 basis points to 2.715%. The June inflation data, which is due to be released next week, will also play a crucial role in the central bank’s decision.
Industry Performance
Tariff-exposed sectors such as transportation and manufacturing had been showing signs of strain over the past three months. However, in June, manufacturing posted a jump of 10,500 jobs, while transportation dropped by 3,400 people. The layoff rate in June did not show any major uptick and remained low at 0.5% relative to historical averages.
Key Statistics
The participation rate, or the number of people employed and unemployed in the total population, was at 65.4% in June, up from 65.3% in May. The average hourly wage of permanent employees grew by 3.2% to C$37.22.
Conclusion
In conclusion, the unexpected drop in Canada’s unemployment rate and the increase in employment are positive signs for the economy. The Bank of Canada’s upcoming monetary policy decision will be closely watched, and the June inflation data will be a key factor in determining the direction of interest rates. Overall, the labor market is showing signs of resilience, despite some challenges in certain industries.
