Canada's unemployment rate ticked up to 5.4 per cent in June — the highest it’s been in over a year.
It marked the second month in a row the unemployment rate has risen as economists watch for softening in the labour market amid high interest rates.
Statistics Canada said Friday the increase came as the economy added 60,000 jobs in June, driven by gains in full-time work.
But with more people searching for work and Canada’s population growing, the unemployment rate climbed higher.
Job gains were concentrated in wholesale and retail trade, manufacturing, health care and social assistance and transportation and warehousing.
The loosening of the labour market likely comes as good news to the Bank of Canada, which is looking for signs that its aggressive rate hikes are working to cool the economy.
The central bank has said repeatedly that Canada’s hot labour market is contributing to high inflation, raising concerns about the pace of wage growth in particular.
However, Statistics Canada said wage growth also softened last month, rising 4.2 per cent from a year ago. That compared with a year-over-year gain of 5.1 per cent in May.
The central bank is gearing up for its interest rate decision next week. Its move to raise interest rates last month has led many forecasters to expect another rate hike on July 12.
The central bank hasn’t given any clear indication of its plans, saying it will make its decision based on the economic data.
Its key interest rate is at 4.75 per cent, the highest it has been since 2001.
Banner image: THE CANADIAN PRESS/Christinne Muschi
This report by The Canadian Press was first published July 7, 2023.
