The National Capital Region’s unemployment rate rose for the fourth consecutive month in September as the local job creation engine failed to keep pace with population growth.
Ottawa-Gatineau had a jobless rate of 4.9 per cent last month, up from 4.8 per cent in August, Statistics Canada said Friday.
A net total of just 1,400 jobs were added to employers’ payrolls in September, while the labour force grew by 2,100 people, the agency reported.
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Two of the region’s main economic drivers, public administration and technology, both continued to grow last month. In addition, more people were employed in key sectors such as retail and educational services.
Meanwhile, jobs were shed in finance and real estate, professional, scientific and technical services and health care.
Overall, the Canadian economy added 64,000 jobs last month as the country’s population continues to rapidly grow.
StatCan’s September labour force survey shows the unemployment rate continued to hold steady at 5.5 per cent for the third month in a row.
Canada’s labour market has cooled over the last year as interest rates have risen, but the unemployment rate remains below pre-pandemic levels.
The unemployment rate averaged 5.7 per cent in 2019, the year before COVID-19 upended economic trends.
Strong population growth has also been supporting larger monthly job gains, as more people enter the labour force.
The job gains last month were concentrated in part-time work, as total hours worked remained unchanged from August.
More people were working in educational services and transportation and warehousing. Meanwhile, jobs were shed in finance, insurance, real estate rental and leasing, information and recreation, and construction.
The Bank of Canada’s rate hikes since March 2022 are beginning to be felt in the Canadian economy as growth slows and job vacancies fall. The central bank’s key interest rate currently sits at five per cent — the highest it’s been since 2001.
Higher interest rates are expected to continue weighing on the economy and affecting businesses’ appetite for hiring.
Despite these conditions, however, wage growth has outpaced inflation this year, making up for previous losses to price growth.
Average hourly wages in September grew 5.0 per cent from a year ago, while inflation came in at 4.0 per cent in August.
Economists say wage growth can be a lagging indicator of economic conditions, given workers tend to ask for higher wages to compensate for past cost-of-living increases.
— With additional reporting from the Canadian Press