Canada's Jobless Rate Jumps Higher As More People Lose Jobs
This is the 3rd consecutive month that Canada's jobless rate has shown a consistent increase. According to recent numbers, the jobless rate now stands at 5.4%, which is an indication that the overheated economy is now cooling down.
Earlier, the Canadian economy was at risk of getting too overheated due to the low-interest rates. But with a steady rise in the interest rates, it seems that the Canadian economy is now shedding jobs, as evident from the rising jobless rate.
In just a month of August, around 39,700 jobs were removed from the Canadian economy. The analysts were forecasting that the economy would add 15000 jobs instead! So not only did the economy not add any jobs, it actually shed close to 40,000 jobs which tells us that the situation is getting worse.
Canadian Economy is Slowing Down
According to experts, this is a clear indication that the Canadian economy is slowing down. If we look at the unemployment rate, it is also rising, which indicates some changes are now happening in the labor market. The experts further commented that it is going to be a slow process and is not complete yet.
During the last 3 months, Canada has lost around 113,500 jobs, and most of these were full-time. However, full-time employment in Canadian is still around 3.9 higher than last year.
Wage gains which indicate how much wages have increased, also show a healthy increase. In July, the number was at 5.4%, while it is around 5.6% now.
When people were asked about their future plans, a lot of them said that they were planning to leave their current jobs. The top reasons behind this decision were the benefits and the pay.
Wage pressure is an important indicator that can also lead to higher inflation. That's why the experts believe that the Bank of Canada will continue to keep the interest rates higher.
For an economy, the size of Canada, the rise in a jobless rate close to 5% or even higher is not a good indication at all. In simple words, a lot of people are either leaving their jobs or are getting laid off as the economic growth is slowing down.