Kelowna jobless rate drops
The Canadian Press - May 10, 2024 - Biz Releases

Photo: The Canadian Press

The national job numbers from April were solid, and that was also the case in the Central Okanagan.

Statistics Canada released its Labour Force Survey on Friday, and it found Metro Kelowna’s unemployment rate fell by half a percentage point last month, landing at 4.9%. The region’s jobless rate has fallen every month since it hit a nearly two-year high of 5.6% in January.

B.C.’s unemployment rate also fell by 0.5% last month, and the nation added 90,000 jobs overall. That, however, has many believing a June interest rate cut from the Bank of Canada will be less likely to happen.

There were 113,800 people employed in Metro Kelowna last month, which was the most since last September, when the unemployment rate hit a record low of 2.5%.

The Thompson-Okanagan rate fell even more substantially in April, dropping nearly a full percentage point to 5.8% from 6.7% in March.

B.C.’s jobless rate is the lowest in Canada at 5%, well below the national average of 6.1%. The province gained 23,400 jobs in April.

James Orlando, TD’s director of economics, said the national jobs number was a “real shocker” and that it “wasn’t even in the realm of anyone’s forecast.”

The April employment gain was the largest monthly increase since January 2023.

The report comes as economists have been widely expecting the central bank to begin lowering its policy rate in June or July. The Bank of Canada has been particularly encouraged by progress made on inflation and has signalled that it’s inching closer to a rate cut.

But the latest employment numbers have made financial markets less certain an interest rate cut will materialize next month.

Orlando said waiting until July will give the central bank more certainty that it’s not cutting interest rates prematurely.

“What that does is just gives the Bank of Canada just a little bit more time to make sure the current economic environment … doesn’t lead to more inflation,” Orlando said.

BMO chief economist Douglas Porter also sees Friday’s report giving the Bank of Canada “some pause,” noting it’s reinforcing the point that “the economy is clearly not rolling over.”

But Porter said the bank may choose to focus more heavily on longer term trends, which suggest economic slack is rising.

Population growth has outpaced job creation over the last year, which has pushed up the unemployment rate by a full percentage point. Compared with a year ago, unemployment is up across all major demographic groups, with youth taking the largest hit, Statistics Canada said.

The data showed employment in April increased in professional, scientific and technical services, accommodation and food services, health care and social assistance as well as natural resources.

Employment fell in the utilities industry.

Wage growth slowed last month to an annual pace of 4.7%, down from 5.1% in March.

The Bank of Canada’s next interest rate decision is scheduled for June 5. Its key interest rate currently sits at 5%, the highest it’s been since 2001.

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