Photo: The Canadian Press
Metro Kelowna bucked the national employment trend in June, as the economy added 800 jobs and the unemployment rate dropped by nearly half a percentage point.
The region’s jobless rate dropped for the fifth consecutive month, checking in at 3.9% after registering at 4.3% in May. The 3.9% mark is its lowest since November and down substantially from its recent high of 5.6% in January.
Overall, the Canadian job market stalled in June as the economy lost 1,400 jobs and the unemployment rate climbed to its highest level in more than two years, bolstering the case for further interest rate cuts by the Bank of Canada.
Statistics Canada said Friday the unemployment rate came in at 6.4% for the month, up from 6.2% in May, as the size of the labour force grew.
The June result was the highest reading for the unemployment rate since January 2022, when it was 6.5%.
The unemployment rate also dropped across the entire Thompson-Okanagan, falling to 4.8% in June from 5.1% in May.
B.C. lost just fewer than 10,000 jobs in June, but its unemployment rate of 5.2% is the second lowest among provinces and well below the national average.
“In the face of high interest rates and slower global economic growth, B.C. is holding steady,” BC Minister of Jobs, Economic Development and Innovation Brenda Bailey said in a press release.
“We have gained 72,300 jobs since June 2023. This month we gained 5,000 jobs in the private sector. Compared to this time last year, B.C.’s private-sector employment is up by 47,700, the second-largest increase among provinces over this period.”
As for a potential rate cut, TD Bank managing director and senior economist Leslie Preston said financial markets increased the odds of a rate cut by the Bank of Canada at its July 24 decision following the jobs report.
“The Bank of Canada is not out there to see Canadians lose jobs, but they do want to see … slightly cooler conditions in the labour market,” Preston said. “So this is certainly consistent with what they’re looking for.”
The central bank cut its key interest rate last month for the first time since the early days of the pandemic. The bank’s policy interest rate stands at 4.75%.
Preston said TD was still forecasting that the Bank of Canada would wait until September before cutting again but noted there are two key data points to come before the July rate decision: the central bank’s quarterly business outlook survey and the June inflation report.
“Certainly inflation will be a big one, but I wouldn’t want to downplay the business outlook survey,” Preston said. “That’s also a pretty important one.”
BMO chief economist Doug Porter said the jobs report drives home the point that the Canadian labour market can no longer be considered tight and is tipping in the other direction.
“We learned last week that the job vacancy rate has dropped below pre-pandemic levels, and the unemployment rate is now steadily marching higher into weak terrain,” Porter wrote in a report.
“As a stand-alone result, the softening job market raises the odds of a Bank of Canada rate cut. However, wages remain the very definition of sticky, which will give the bank pause.”
Average hourly wages among employees were up 5.4% on a year-over-year basis in June.
— with files from The Canadian Press
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