Saturday, September 23, 2023

The unemployment rate in Canada rose by two-tenths in May, to 5.2%, due to younger people and the self-employed

Canada’s unemployment rate rose two-tenths to 5.2% in May, after destroying 17,000 jobs, according to data published by Statistics Canada this Friday, meaning eight straight months of job creation stalled.

The data, further the public agency, is explained by the behavior of the labor market, especially for young people (-77,000) and the self-employed (-40,000). Nevertheless, the situation has “barely changed” despite the fact that the unemployment rate rose for the first time in nine months after remaining stable at 5% since December last year.

Youth unemployment, that is in the 15 to 24-year-old age group, stood at 10.7%, 1.1% higher than in April, while those aged over 55 remained at 4.1% after an increase of two-tenths. Meanwhile, 4.3% of citizens aged 25-54 were unemployed, unchanged.

The regions of Ontario, Nova Scotia and Newfoundland and Labrador recorded job losses, which increased in Manitoba and remained practically unchanged in the rest of the province.

The participation rate fell a tenth to 65.5% in May, and the North American nation recorded 20,113,000 workers and 1,093,000 unemployed. In an inter-annual comparison, wages increased by 5.1% and hours worked by 2.2%.

Rate of interest

Just two days ago, the Bank of Canada decided on Wednesday to raise interest rates by 25 basis points to 4.75%, the highest currency rate in 22 years, after keeping them unchanged since last January.

“Generally, inflation is falling, mainly due to lower energy prices compared to last year, but the underlying variable remains unbearably high,” the monetary authority explained in a press release.

The most recent reading for April was 4.4% on both the headline and core indexes. However, the overall rate rose by one-tenth of a point for the first time in ten months, while the underlying rate fell by one-tenth of a point to 4.5%.

The agency reported that the Canadian economy was “stronger than expected with GDP growth of 3.1% in the first quarter of 2023.” In this regard, the strength of consumption was “surprisingly strong and widespread”, and the housing market expanded as did services.

Furthermore, despite high participation and immigration rates, demand remained “excessive” and “persistent” in the face of a “tight” labor market.

World Nation News Desk
World Nation News Desk
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