09/04/2023
📉🇨🇦 Canada's job market is showing signs of cooling down, giving the central bank some room to hold interest rates steady next week. Job vacancies dipped 1.2% to 753,400 in June, their lowest in over two years, according to Statistics Canada. The vacancy rate eased to 4.2%.
This data suggests that Canada's labor market is gradually cooling in an orderly manner. It's a significant shift from the record high of a million vacancies in May 2022, with the vacancy rate trending down from its peak at 5.7%. Governor Tiff Macklem has been closely monitoring the job vacancy rate, as it affects the unemployment rate, and this development aligns with the goal of managing the economy without causing undue harm.
With a modest increase in unemployment to 5.5% in July and falling job vacancy rates, it seems like Canada's labor market is heading towards a soft landing. Most economists in a Bloomberg survey anticipate that the central bank will keep interest rates at 5%, signaling a pause in tightening monetary policy.
In June, finance, insurance, accommodation, food services, and the construction industry saw the largest monthly declines in job vacancies. On the flip side, health care and social assistance saw a rebound, with the sector also experiencing the most significant monthly increase in payroll employment.
While there are signs of a looser labor market, it's worth noting that wage gains remain higher than desired by Macklem. 📈💼
