Canada’s labor market stalled even as the jobless rate fell to a new record low, hampered by a dearth of new workers.
According to Statistics Canada, the economy added 15,300 jobs in April, fewer than half the 40,000 gain anticipated by economists. The small increase ended a surge that saw Canada create about 410,000 jobs over the previous two months.
The unemployment rate fell to 5.2% in April—its lowest since 1976—as the economy failed to produce any new growth in the labour force.
With employment already well above pre-pandemic levels, economists and policymakers have been anticipating a slowdown in job creation as the nation struggles to find new workers, amid elevated demand from employers.
The imbalance between demand and supply of jobs is a primary reason why the Bank of Canada is tightening monetary policy. Canada’s economy has added almost 1 million jobs over the past year, with employment nearly half a million above February 2020 levels.
“This is an indication that we’re reaching a fairly mature stage in the economic cycle,” Josh Nye, a senior economist at Royal Bank of Canada, told BNN Bloomberg television. “It’s just going to be difficult to generate job gains on the scale that we’ve been used to in the past year or so.”
