- विज्ञापन -
The Canadian economy demonstrated resilience by adding its largest number of jobs in six months, despite prevailing tariff uncertainties, and saw its unemployment rate decline for the first time since January. In June, employment increased by 83,100 jobs, and the unemployment rate dropped by 0.1 percentage points to 6.9%, surpassing even the most optimistic forecasts in a Bloomberg poll of economists. Notably, part-time employment was responsible for 84% of the job growth during that month.
This month marked the first in five months where the economy generated enough jobs to prevent the unemployment rate from rising, following months of modest gains and setbacks. Over the past six months, Canada has created a total of 143,800 jobs, the slowest six-month period since 2018 outside of the pandemic era, with an average of 24,000 new jobs per month.
The Canadian dollar slightly recovered after the report, trading at C$1.3668 per US dollar as of 8:49 a.m. in Ottawa. Additionally, Canadian government bond yields increased to their daily highs following the employment data. The Bank of Canada has kept interest rates steady at 2.75% over the last two meetings, with future moves likely influenced by how trade tensions and tariffs impact the economy and inflation. Despite expectations of a slowdown in Q2, inflation remains a concern, leading to cautious market bets on potential rate cuts, with traders reducing their expectations for easing at the upcoming July 30 meeting.
According to Katherine Judge, an economist at Canadian Imperial Bank of Commerce, although the unemployment rate remains somewhat high, the positive data across other indicators make a rate cut by the Bank of Canada in July less likely. Currently, the trade war’s effects on Canada’s employment seem confined mainly to sectors heavily reliant on U.S. demand, but new threats are emerging. President Donald Trump announced that starting August 1, imports from Canada will face a 35% tariff, adding to existing tariffs on auto, steel, and aluminum products.
These tariffs are already impacting industries such as auto manufacturing in Windsor, Ontario, where the unemployment rate rose by 2.1 percentage points to 11.2%, the highest among large Canadian cities. Overall, in June, Canada had 1.6 million unemployed people, a 9% increase from the previous year. Many workers are facing longer search times, with over 20% having looked for over 27 weeks. The layoff rate remained unchanged.
The employment rate increased slightly to 60.9%, driven by job gains in the private sector (47,000 jobs) and public sector (23,000). Notable growth occurred in wholesale and retail trade, healthcare, social assistance, professional services, and manufacturing, while agriculture saw a decline. Total hours worked rose by 0.5% in June and were 1.6% higher than a year earlier. Employment increased in Ontario, Quebec, Alberta, and Manitoba, but declined in Newfoundland and Labrador, and Nova Scotia. Meanwhile, annual wage growth for permanent employees slowed to 3.2%, below economists’ expectations of 3.5%.
