Canada Unemployment Rate Rises

Canada – The Canadian unemployment rate jumped to 5.2% in May 2023, after holding at 5% for the previous five months, above market expectations of 5.1% to represent the first monthly increase in the unemployment rate since August 2022. The figures revealed that the Canadian labor market is now yielding to the Bank of Canada’s increased interest rates after being stubbornly tight for a long time, as unemployment jumped by 34,800 people to 1,058,200. People aged 55 and over were much more likely to be unemployed (+0.2pp to 4.1%), while the core-aged labor force remained roughly stable (at 4.3%).

As a result, 17,300 jobs were lost in Canada, falling far short of market estimates of a rise of 23,200. Meanwhile, the labor force participation rate declined by 0.1 percentage point throughout the period, to 65.5%.