Canada's Prime Minister Justin Trudeau speaks next to his International Trade Minister Mary Ng at a press conference during a stopover visit to Singapore on September 8, 2023. (Photo by Roslan Rahman / AFP)
Ottawa: Nearly 40,000 new jobs were created in Canada in August -- twice as many as expected, but not enough to keep pace with record population growth, the government statistical agency said on Friday.
That resulted in the unemployment rate holding steady at 5.5 percent following three consecutive monthly increases.
"Employment is still rising, but so is the unemployment rate with job demand no longer strong enough to keep up with a rising supply of workers from surging population growth," RBC Economics assistant chief economist Nathan Janzen summed up.
Despite the uptick in job numbers, he said the steady unemployment rate was "still likely consistent" with the central bank's assessment this week that the labor market was coming into balance.
Desjardins analyst Royce Mendes agreed, saying the jobs data alone "won't make the Bank of Canada regret holding steady rates earlier this week."
“However,” he added, “it does highlight that the economy hasn't completely stalled,” and so the central bank is not likely to signal anytime soon that it is done with inflation-busting interest rate hikes altogether.
The bank paused its aggressive monetary policy on Wednesday, maintaining its key lending rate at 5.0 percent after raising it 10 times in the past 18 months.
Inflation has fallen from a recent high of 8.1 percent in June 2022 to 3.3 percent in July -- getting closer to but still above the bank's 2.0 percent target.
According to Statistics Canada, employment in August increased most in professional, scientific and technical services (+52,000) and construction (+34,000).
But it declined in educational services (-44,000), manufacturing (-30,000), finance, insurance, real estate and leasing (-16,000) and agriculture (-11,000).
The number of self-employed workers rose by 50,000 or 1.9 percent while there was little change in the private sector or in the public sector.
Meanwhile, record immigration fueled a rise in Canada's population in August by 103,000 or 0.3 percent, after it grew by about 81,000 per month since the start of the year -- more than twice the previous average.
Statistics Canada noted that reduced "labor market churn" may be making it harder for job seekers to find employment compared to last year.
The proportion of workers who changed jobs was just 0.4 percent in August, half the previous average, it said.
"A lower job-changing rate may indicate that workers are settling into jobs, or that the labor market has become less favorable to employees seeking new opportunities," the agency explained.
It also noted that about one million people held multiple jobs. One third of them -- up from one-fifth in past surveys -- indicated it was by necessity to pay for soaring costs of living.
More workers also went back to the office after the pandemic work-from-home arrangements ended, leaving only 13.6 percent still exclusively teleworking.
