Unemployment rate ticks up to 5.5% in July as job creation lags population growth
“Canada’s unemployment rate rose again last month, as the economy struggles to create enough jobs to match the pace of population growth.
Statistics Canada reported Friday (August 4) employment was little changed in July, falling by 6,400 jobs.
Meanwhile, the unemployment rate ticked up to 5.5%.
As Canada’s population continues to grow rapidly, rising unemployment signals the economy isn’t creating enough jobs to absorb a larger workforce.
July marks the third consecutive month that the unemployment rate has risen, signalling some loosening in the labour market.
The federal agency says job losses were led by the construction industry, while the greatest job gains were made in health care and social assistance.
Rising unemployment comes as high interest rates weigh on the economy.
The Bank of Canada’s key interest rate sits at 5%, the highest it’s been since 2001.
High interest rates are making borrowing more expensive for both businesses and consumers, which in turn is expected to lead to job losses.
The central bank is hoping to see the economy slow down as it works on getting inflation back to two per cent.
It’s cited concern about the pace of wage growth as well, which rebounded in July, rising 5% year over year.”
*This article is excerpted from Canadiangrocer.com website, published 4th August 2023