The number of job vacancies in Canada continues to decline, suggesting demand for labor is cooling amid higher interest rates and strong population gains.
(Bloomberg) — The number of job vacancies in Canada continues to decline, suggesting demand for labor is cooling amid higher interest rates and strong population gains.
The number of unfilled positions fell 26,000 to 759,000 in May, the lowest in two years. That’s down nearly a quarter from a peak of 1 million in the same month last year, Statistics Canada reported Thursday in Ottawa.
Canada’s job vacancy rate — or the number of vacant jobs relative to the total number of positions — also hit a two-year low, falling to 4.3%.
The data suggest businesses are having an easier time finding workers as the economy slows and higher interest rates take hold. A continued decrease in the number of unfilled positions typically coincides with slowing demand for labor, though record immigration may also be helping to ease pressures.
Job vacancies decreased in six sectors in May, led by health care and social assistance and accommodation and food services. At the same time, vacancies increased in three sectors: manufacturing, finance and insurance and management of companies and enterprises.
Policymakers at the Bank of Canada are watching for signs that Canada’s tight labor market is re-balancing, and have cited a decrease in vacant positions as evidence of cooling. Falling vacancies are also a key metric for achieving a “soft-landing” for the economy — getting inflation back to the 2% target with fewer actual job losses than in past downturns.
Meanwhile, the number of payroll employees increased by 129,900 in May. That figure was boosted by federal government public administration workers returning to their jobs after striking in April. Excluding the sector, payroll employees increased by 23,300 in May, Statistics Canada said.
“Today’s data continued to show a gradual loosening of labor market conditions with employment ex. public admin rising only modestly and the job vacancy rate continuing to edge lower,” Andrew Grantham, an economist with Canadian Imperial Bank of Commerce, said in a report to investors.
Average weekly earnings for all employees were up 3.6% in May compared with a year earlier, Statistics Canada said.
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