Canada’s unemployment rate surged to 6.1 percent in March as more folks hunted for work, according to the recent report from Statistics Canada.
Compared to February's 5.8 percent, this figure marks the most significant spike in unemployment since summer 2022.
In March, there was hardly any change in employment, with the economy dropping 2,200 jobs, following modest increases over the past few months.
Andrew Grantham, CIBC's executive director of economics, noted in a client message, "The cracks that had been emerging within the Canadian labour market suddenly got a lot wider."
This rise in unemployment coincides with the drag of high interest rates on the economy and robust population growth adding to the workforce.
Compared to the previous year, the unemployment rate increased by one percentage point.
Youngsters are particularly bearing the brunt in the job market. Employment among those aged 15 to 24 saw a decline of 28,000 in March, with the jobless rate for this group hitting 12.6 percent, its highest point since September 2016, excluding 2020 and 2021.
The report reveals that job losses in March were mainly in accommodation and food services, followed by wholesale and retail trade, and professional, scientific, and technical services.
Conversely, employment saw growth in four sectors, primarily in health care and social assistance.
Statistics Canada attributes the rise in the jobless rate to a surge of 60,000 individuals actively searching for work or facing temporary layoffs.
Last month, the total number of unemployed individuals in the nation reached 1.3 million, marking an increase of nearly 250,000 compared to a year earlier.
Despite the softer job market, wage growth has maintained momentum, with average hourly wages increasing by 5.1 percent annually.
This job report stands as the final major economic indicator before the Bank of Canada's upcoming interest rate decision on Wednesday.
Investors are eager for any indications from the central bank regarding the timing of potential rate adjustments. Currently set at five percent, speculation was initially leaning towards the first rate cut occurring in June or July. However, following the latest job data, expectations are shifting more towards June.
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