Q2 2024 Canada Labour Market Brief: Slowing Inflation and Signs of Slack in the Labour Market Prompt the First Interest Rate Cut Since March 2020

Actalent's quarterly Labour Market and Economy Report connects important dots between data and trends across Canada’s engineering and sciences hiring landscape. Readers can expect to learn about job growth, wage growth, inflation, unemployment rates, labour force participation rates and other key factors that impact the attraction, hiring and retention of workers.

Executive Summary

Canada’s economy added 115,700 jobs in Q2 2024, nearly matching the total number of jobs gained in the previous two quarters combined. Although job gains from the second quarter appear strong at first glance, many sources have stated that Canada’s employment growth is not keeping pace with its population growth.

The average quarterly unemployment rate rose again from 5.9% to 6.2% in Q2, marking the fifth consecutive quarterly increase. Among the industries Actalent supports, Q2 2024 unemployment rates were as follows: utilities (1.7%); healthcare (1.7%); construction (5.7%); professional, scientific, and technical services (3.5%); and manufacturing (3.8%).

Year-over-year inflation eased again in Q2, starting at 2.9% and ending at 2.7%. In June, the Bank of Canada lowered their key interest rate by 25 basis points to 4.75%, citing increased confidence that inflation was moving closer to their 2% target. This marked the first rate cut since March 2020.

The year-over-year average hourly wage rate for all employees increased 5.1% from Q2 2023 to Q2 2024, the same rate of wage growth observed in Q1. In terms of “real” earnings (adjusted for inflation), wages continue to outpace inflation.