The Conference Board of Canada
Despite Uptick in Unemployment, Wage Growth Surges
Ottawa, August 9th, 2019—The Conference Board of Canada’s Economist Cory Renner offers the following insights on today's Labour Force Survey (LFS):
“24,200 fewer jobs for the month and weak labour force growth meant the unemployment rate ticked up slightly in July. However, the decline should be taken in the context of Canada’s phenomenal labour market performance over the past 7 months. Even still, two straight month of jobs declines suggests Canada’s labour force is losing some steam. On the positive side of things, year-over-year wage growth rose to a ten-year high.”
- Jobs declined by 24,200 in July. There were both fewer full-time jobs (-11,600) and fewer part-time jobs (-12,600),
- Job growth was notable in Quebec (+16,600). The rest of the country fared much worse, with Alberta seeing the largest decline (-14,300). Ontario (-10,700) and British Columbia (-4,800) also saw notable weakness this month.
- Private sector jobs declined by 69,300 in July, the largest decline since 2009.
- The labour force grew by a modest 11,200 (it has grown by an average of 16,500 per month since the beginning of 2014).
- Population growth (+55,400) outpaced the gains in the labour force causing the labour force participation rate to decline slightly in July.
- A decline in employment and a larger labour force means more unemployed workers—the unemployment rate edged up to 5.7 per cent, the highest reading since April.
- Even with the higher unemployment rate, year-over-year growth in average hourly wages rose to a whopping 4.5 per cent in July compared to a year prior.This is the highest year-over-year gain since early 2009.
- Wage growth improved for both goods-producing industries (+4.1 per cent year-over-year in July compared to +3.6 per cent in June) and services-producing industries (+4.8 per cent in July compared to +3.8 per cent in June)
- Overall, Canada’s labour market performance was poor in July but this should be taken in context. Job growth so far this year has been amazing, and the unemployment rate remains at near record lows. Still, two consecutive months of declines does suggest the labour market is beginning to lose some steam, while the uptick in unemployment could put some downward pressure on wages moving forward.