Canada’s unemployment rate fell to 5.1%, marking three consecutive months of decline while this key labour market indicator has reached a new record low. According to The National Statistical Agency, the tightening job market has contributed to a year-over-year reduction in unemployment rates among the core-aged population.
According to the most recent Labour Force Survey, the labour force gained 39,800 positions, the majority of which were full-time jobs. Last month, more than 135,000 people secured full-time work. Women workers of all ages were the driving force behind the gains.
In a commentary, TD Bank economist James Orlando said, “Employers continue to look for workers to meet heightened demand as we begin the routine of filling patios and hitting the road for overdue vacations. This has resulted in high job vacancy rates, indicating that the Canadian economy is operating beyond full employment.”
According to Statistics Canada, total hours of work in May 2022 were a little changed from the previous year and the average hourly wages grew 3.9%(+$1.18 to $31.12) on a year-over-year basis.
As per a related survey, the ratio of unemployed people to job openings hit an all-time low of 1:2 in March, highlighting labour supply difficulties faced by firms looking to recruit and retain workers.
Economist Sean Adams remarked, “With an ageing population, the number of retirees leaving the workforce will outweigh the number of new workers entering it in the coming years. The drop in participation rates will result in unemployment rates staying low even as the Canadian economy achieves limited employment growth.”
In May, there were 409,000 workers who did not actively participate in the labour force but reported that they wanted to work. However, the number of potential workers came up short of more than 1 million job vacancies reported in the job vacancy survey.
Canada is all set to welcome 431,645 new permanent residents, setting a new record. The country has already welcomed approximately 114,000 new permanent residents in the first quarter of 2022 alone and is on track to meet the target.
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