As reported by Statistics Canada, the Canadian labor market is becoming tense making it more complicated for employers in Canada to hire appropriate workers.
In the previous month, the employment figure was down to 43,000 and this downfall was not due to public health restrictions. The decline in employment happened because a vast number of people turned 55 years and the older individuals stopped working, making it far more difficult for Canada to increase its workforce.
The Canadian unemployment rate reached its lowest level at 4.9 percent. This unexpected record-breaking unemployment rate is due to a reduction in the number of individuals seeking employment.
The employment rate as per adjustment level decreased to 6.8 percent comprising those individuals who no longer participated in the labor force but wished to work.
The Conference Board of Canada stated through its economist Liam Daly that even though the labor market in Canada had tightened, the employment rate continued to increase among the diverse group of people. The diverse group included individuals who recently arrived in Canada as well as the indigenous workers of their prime age. The female aged workers were at 81 percent in terms of employment rate as compared to the record of May.
The improvements in the employment rate are a result of an increased labor shortage. The increase in labor shortage is attracting workers who face typical underemployment issues or reduced employment rates and lack of labor force participation.
In June, the employment figure was reduced by 76,000 in the services-producing sector. The decline in the figure resulted in a widespread loss in many other industries and retail trade was one of them. The goods-producing sector witnessed an employment increase of 33,000, leading to success in the construction and manufacturing industries. The construction sector is said to have experienced the first growth since March. Nikita Perevalov, an economist in Scotiabank stated that the employment rate increase is an indication that the construction sector is renewing, even though the retail trade remains a cause of great worry.
The retail and wholesale trade sectors experienced a drastic decline in the employment rate with 61k reduced jobs. The reduction in the jobs in the above sectors is majorly a result of higher inflation prices or even customer disengagement.
The current condition of the labor market resulted in increased Canadian wages. June reported the average wages (based on hours) with a rise of 5.2 % to $31.24 annually.
According to an economist at Ted Bank, the tightened Canadian job market is leading to better growth in wages.
The best possible solution to meet the increasing labor shortage is to increase the number of immigrants. These immigrants should also meet the demands for skilled and talented workers. This year, Canada targets to welcome 431,645 new individuals becoming permanent residents. In the first six months, Canada received 200,000 new permanent residents. At present, Canada continues to meet its target.
