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Sun. Jul 14th, 2024

The Canadian rollercoaster ride of vacancies is over

By Vaseline May30,2024

Canada’s job vacancy rate fell to its lowest level since before the pandemic in March, providing new evidence that the labor market is cooling ahead of next week’s Bank of Canada interest rate decision.

The number of vacancies has fallen since reaching a record high of more than a million in May 2022, when the bank raised interest rates to rein in inflation and an overheated economy. There were just over 610,000 job openings in March, resulting in a vacancy rate of 3.4 per cent, according to Statistics Canada’s latest wage survey.

Roughly ⅔ of sectors now have vacancies at or below pre-pandemic levels, including financial, retail, professional and technical, real estate and construction.

Demand for jobs is still highest compared to early 2020 in healthcare, where hospitals are facing an acute shortage of nurses.

Bank of Canada officials have regularly cited the drop in job openings as evidence that high interest rates are working, and economists believe the latest payroll report suggests a rate cut is imminent, even as job growth in the fastest pace since last year. November.

“Despite significant employment growth, which continues to lag behind population growth, this report adds further evidence of the slowdown in the labor market, which is consistent with expectations that the Bank of Canada will cut interest rates,” says Shelly Kaushik, economist at the Bank. of Montreal, wrote in a note.

Decoder is a weekly feature that unpacks a major economic chart.

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