Unemployment Rates

Canada’s unemployment rate fell to a record low of 5.2% in April

Canada’s unemployment rate fell to 5.2% in April, its lowest level since data began to be released.

followed in 1976, as the economy failed to produce further growth in the labor force.

The economy added 15,300 jobs in April, according to Statistics Canada, less than half of
40,000 gains predicted by economists. The small increase ended a push that saw Canada create
410,000 jobs in the previous two months.

With employment already well above pre-pandemic levels, economists and policymakers have
anticipated a slowdown in job creation as the country scrambled to find new workers, amid
high demand from employers.

The imbalance between demand and supply of jobs is one of the main reasons why the Banque de
Canada is tightening its monetary policy. The Canadian economy has created close to one million jobs over the
last year, with nearly half a million jobs above February 2020 levels.

Fears that Canada’s economy is at the limit of its capacity are fueling expectations for the Bank of
Canada will be raising interest rates aggressively over the next few months, including a half-point hike to
its political decision in June.

Canada’s central bank has already raised its trend rate by 0.75 percentage points since
March at 1%, and overnight swap trading suggests it will rise another two%
points by the end of this year.

Canada’s participation rate fell to 65.3% in April. Adding to the evidence of a
market tightening, involuntary part-time employment reached 15.7%, a record high.

Average hourly earnings rose 3.3% in April from a year earlier, little change from 3.4% in
March. For permanent employees, salaries increased by 3.4%. The nation lost 31,600 full-time jobs in
April, which was more than offset by an increase of 47,100 part-time jobs.

Construction led the declines, with employment in the sector down 20,700 jobs. Service-related
industries posted a gain of 31,400 for the month.