For weeks now, we’ve been hearing about how the economy is cooling and we are headed toward a potential recession. After a strong start to 2022, particularly because of the post-pandemic recovery efforts, there are signs that things are slowing down slightly. Higher interest rates and inflation are the two most commonly cited reasons.
While the economy and job market are always closely linked, they are not always completely in sync. Below, we’ll take a look at recent job market stats to see the current state of the Canadian market.
The Job Market Appears to Be Cooling Slightly
It appears that recent economic measures taken by the federal government and financial institutions are starting to affect the job market. According to Bloomberg,
“Canadian employment levels unexpectedly fell for a third straight month in August and the jobless rate jumped, a potential signal interest-rate hikes have started to cool the tight labour market.”
This is a sign that the higher interest rates are starting to have an effect on cooling the economy as anticipated. The article summarizes the current state of the job market:
- The economy lost 39,700 jobs in August. There is a cumulative decline since May to 114,000.
- The jobless rate rose to 5.4% from record lows of 4.9% in June and July.
- The average hourly wage rate was up 5.4% from a year ago.
- The number of hours worked was unchanged in August.
- Labour force participation rates rose 0.1 percentage points to 64.8%.
- The number of Canadians in the labour force grew by 66,000 in August.
These are signs the market is shifting and rebalancing after the interest rate hikes in the previous months.
The Market Is Cooling but Not in Every Industry or Region
While these numbers are for the Canadian economy in general, how things play out by region and industry can vary significantly. For example, our technology and engineering recruiters continue to see a strong job market in their respective sectors.
Bloomberg found, “Employment declines were driven by educational services and the construction sectors. The public sector shed 27,600 positions, the bulk of August’s job losses.”
Labour shortages still exist in many industries. There are still many companies looking to fill employment gaps at all levels in their organization. So, before you assume the worst, assess the labour market locally and regionally.
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