Statistics Canada reported that the labor market of Canada is still facing a labor shortage and the employers in Canada facing challenges to find skilled workers.
Last month employment in Canada dropped by 43,000. The low employment rate of Canada indicates the first employment decreases linked to public health restrictions at the start of the pandemic. Canada’s unemployment rate is fell because of the large number of people who reached at age of 55 or older leaving the labor force.
As some individuals search for jobs, Canada’s unemployment rate drops down to a new record of 4.9%. employment has now surpassed the level because very few individuals are looking for a job, which becomes the prime reason for the reduction in unemployment. Another record low of individuals who are not in the workforce but seeking a job dropped to 6.8%.
Canada’s conference board economist Liam Daly said, there has been an increase in employment among various groups such as recent immigrants and core-aged indigenous workers living off the reserve in the middle of a labor shortage in the market. Moreover, the employment rate of female workers recorded an 81.3% high in May.
Daly wrote that the purpose of these reforms was to increase labor shortages and increase the comprehensiveness of the labor market by attracting workers who are unemployed.
In June employment was reduced by 76,000 in the services-producing department due to which many industries including trade services faced losses. However, employment in the goods-producing department increased by 33,000 as well as profit in the construction and manufacturing departments. The increment in the construction department was observed for the first time since March. Nitika Perevalov economist of Scotiabank said that the increment in construction is a sign that it will boost up again.
Perevalov wrote, “related to the decline in employment in the retail and wholesale trade sectors (-61K net jobs), which may be evidenced by declining spending because the customer is exhausted with a translating affectation of high price into a small number of jobs in the department.
Due to Canada’s tight labor market salaries for workers are rising up. In June, the median hourly wage rose 5.2% on a year-over-year basis to $31.24.
Ridhi Sindhi economist of TD bank has written that labor shortage in the job market become the reason for fueling strong wage growth, which will tend to offset the decline in real income from satisfaction.
Welcoming high levels of migrants who have skills that fulfill the requirement of the labor market is a way to help fill the labor shortage. Canada set their goal to migrate over 431,645 new permanent residents by the end of 2022. Right now, Canada is on the way to completing its immigration target. Canada has already migrated more than 200,000 new permanent residents in the first half of 2022.
