Jobless Rate Increases To 6.2% In May: Are Further Rate Cuts Ahead?

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Statistics Canada reported a decline in the employment rate for returning students aged 20-24 in May, dropping to 61% from 63.9% a year prior.

Economist Brendon Bernard suggests there’s a link between the rising number of workers opting for part-time roles and a sluggish start to the summer job season for students. When established workers face weakened employment prospects, they may turn to seasonal or precarious positions to secure hours. These roles—often found in retail and the hospitality sectors—typically serve as entry points for youth seeking work during breaks.

As a result, students may find themselves squeezed out, competing against existing workers shifting to seasonal jobs and employers reducing hiring in a cooling economy. Bernard emphasises that Canada needs an economic rebound to facilitate access to these entry-level positions for youth.

“We’re currently stuck in neutral, leading to a traffic jam for those entering the job market,” he states.

Despite an increase of 27,000 jobs in May, Canada’s unemployment rate rose to 6.2%, up from 6.1% the previous month.

Statistics ...
... Canada noted that the country’s population is growing faster than job creation. While sectors such as healthcare, finance, and food service saw gains, losses in construction, transportation, and utilities offset these improvements.

The data shows a significant shift towards part-time positions, which rose by 62,000, while full-time roles decreased by 36,000.

These employment figures coincide with the Bank of Canada’s first interest rate cut of the cycle, with officials suggesting there is potential for continued economic growth even as inflation eases.

The data also reveals that more Canadians are taking part-time jobs out of necessity. The proportion of employees in part-time roles involuntarily due to an inability to find full-time work rose to 18.2% in May, up from 15.2% a year earlier.

Bernard notes this marks a shift from the pandemic recovery, which was predominantly driven by full-time employment. Additionally, youth employment showed signs of weakness, coinciding with the start of the critical summer job season for this demographic.

A slowing economy is pushing more Canadians into part-time jobs, hindering young people’s attempts to gain early work experience, according to the latest employment data.

Statistics Canada reported a decline in the employment rate for returning students aged 20-24 in May, dropping to 61% from 63.9% a year prior.

Economist Brendon Bernard suggests there’s a link between the rising number of workers opting for part-time roles and a sluggish start to the summer job season for students. When established workers face weakened employment prospects, they may turn to seasonal or precarious positions to secure hours. These roles—often found in retail and the hospitality sectors—typically serve as entry points for youth seeking work during breaks.

As a result, students may find themselves squeezed out, competing against existing workers shifting to seasonal jobs and employers reducing hiring in a cooling economy. Bernard emphasises that Canada needs an economic rebound to facilitate access to these entry-level positions for youth.

“We’re currently stuck in neutral, leading to a traffic jam for those entering the job market,” he states.

Despite an increase of 27,000 jobs in May, Canada’s unemployment rate rose to 6.2%, up from 6.1% the previous month.

Statistics Canada noted that the country’s population is growing faster than job creation. While sectors such as healthcare, finance, and food service saw gains, losses in construction, transportation, and utilities offset these improvements.

The data shows a significant shift towards part-time positions, which rose by 62,000, while full-time roles decreased by 36,000.

These employment figures coincide with the Bank of Canada’s first interest rate cut of the cycle, with officials suggesting there is potential for continued economic growth even as inflation eases.

The data also reveals that more Canadians are taking part-time jobs out of necessity. The proportion of employees in part-time roles involuntarily due to an inability to find full-time work rose to 18.2% in May, up from 15.2% a year earlier.

Bernard notes this marks a shift from the pandemic recovery, which was predominantly driven by full-time employment. Additionally, youth employment showed signs of weakness, coinciding with the start of the critical summer job season for this demographic.

Read More: https://theleadersglobe.com/money/jobless-rate-increases-to-6-2-in-may-are-further-rate-cuts-ahead/