Over the past two years, the most stunning sign of Canada’s red hot labour market was the deluge of job openings as employers struggled to fill empty positions.
The help wanted signs are now vanishing, and the cool-down in labour demand could give the Bank of Canada more room to hold interest rates steady next week.
In June, the number of job vacancies in Canada edged down by 1.2 per cent to 753,400, having peaked in May, 2022, at more than one million, according to Statistics Canada. That’s the lowest level in more than two years.
The softer vacancy numbers are on pace with a similar return to normalcy in the U.S. job market. This week the U.S. Labor Department said the number of vacancies fell 3.7 per cent in July to 8.8 million, after a similar drop in June.
At the same time, the number of Americans who opted to quit their jobs – a sign of worker confidence in the job market – plunged to the lowest level since early 2021.
The shift away from the tight labour markets comes as central bankers in both countries weigh economic data ahead of their next interest-rate announcements. The Bank of Canada has cited job vacancies as a metric it’s watching to gauge labour-market health and the impact of its interest-rate hikes.
In a note, Katherine Judge, an economist at CIBC, said the drop in vacancies showed “signs of a loosening in labour market conditions,” but also noted that Statscan’s fixed weight measure of wages climbed 3.9 per cent from a year ago, compared with 3.5 per cent in May, “leaving it higher than the Bank of Canada will be comfortable with.”