Canadian Economy Sheds Jobs, Unemployment Rate Rises

The unemployment rate has now risen for three consecutive months, at a time when our overall population is increasing at a rapid pace.

The Canadian economy shed 6,000 jobs in July, and the unemployment rate rose 0.1 % to 5.5%.

This marks the third consecutive month in which the unemployment rate has increased.

As noted by Statistics Canada, job growth is not keeping up with population growth:

“The employment rate—the proportion of the population aged 15 and older who are employed—was 62.0% in July, down 0.2 percentage points in the month and little changed on a year-over-year basis. From January to July, the employment rate fell 0.5 percentage points, as population growth (+1.4%) outpaced growth in employment (+0.7%) over this period.”

Unemployment has now risen for three consecutive months. The unemployment rate rose 0.2% in May, and 0.2% in June.

As noted by Statistics Canada, “This was the first time the unemployment rate had increased for three consecutive months since the early months of the COVID-19 pandemic.”

The employment rate for recent immigrants is higher than it was before the pandemic, but is now trending downwards amid surging population growth:

“In July, the employment rate of core-aged recent immigrants—those who had become landed immigrants in the previous five years—was 77.7%, down 2.3 percentage points from July 2022 (80.0%). In comparison, the employment rate of those born in Canada was 86.6% in July 2023, little changed from 12 months earlier (three-month moving averages; not seasonally adjusted).”

About the only bright spot in the jobs report was the fact that wages grew 5% in June, which outpaced the official inflation rate. However, given that wages have long been lagging inflation, many Canadians still have a long way to go in order to catch up.

A concerning report

Taken in its entirety, the latest jobs report is concerning. Economic statistics – including employment numbers and overall GDP – must be looked at in the context of surging population growth.

Losing 6,000 jobs in a time of low population growth would be one thing. Losing 6,000 jobs when the population is increasing by about 100,000 people per month is another thing.

Canada should be creating tens of thousands of jobs at the bare minimum given our surging population numbers, but that hasn’t been the case recently.

Additionally, we have to ask ourselves what we are getting for all the money being spent by the federal government. How is it that so much money is being spent, and so many new people are arriving in the country, yet we are still shedding jobs?

As always, the issue comes back to productivity, or the lack thereof. On a per capita basis, Canada is getting poorer. And since raising our standard of living requires increasing our per capita GDP, it’s no surprise that more and more Canadians are struggling.

Until we address Canada’s productivity problem, we will continue to underperform economically and fall behind peer nations, no matter how much the federal government spends or how rapidly our population increases.

Spencer Fernando

Photo – YouTube


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