MARKET OVERVIEW
Labour Force Survey: 'Cold Streak Continues'
TOTAL JOBS
Employment in Canada increased by 22,000 jobs in August to a total of 20.5 million. August’s employment numbers were driven by a 66,000 increase in part-time positions, largely offset by a 64,000 decline in full-time work. This marks the fourth consecutive month of little overall employment change.
UNEMPLOYMENT RATE
The unemployment rate rose 0.2 percentage points to 6.6% in August after holding steady in July. This marks the highest unemployment rate since May 2017, excluding the 2020 and 2021 years during the COVID-19 pandemic.
THE EMPLOYMENT RATE
The employment rate—or the proportion of the population aged 15 and older who are employed—declined 0.1 percentage points to 60.8% in August, the fourth consecutive monthly decline and the 10th decline in the last 11 months. On a year-over-year basis, the employment rate is down 1.2 percentage points.
THE LABOUR FORCE PARTICIPATION RATE
The labour force participation rate—or the proportion of the population aged 15 and older who are either working or looking for work—increased 0.1 percentage point to 65.1% in August. On a year-over-year basis, the participation rate was down 0.5 percentage points.
TOTAL JOBS
Employment in Canada increased by 22,000 jobs in August to a total of 20.5 million. August’s employment numbers were driven by a 66,000 increase in part-time positions, largely offset by a 64,000 decline in full-time work. This marks the fourth consecutive month of little overall employment change.
UNEMPLOYEMENT RATE
The unemployment rate rose 0.2 percentage points to 6.6% in August after holding steady in July. This marks the highest unemployment rate since May 2017, excluding the 2020 and 2021 years during the COVID-19 pandemic.
THE EMPLOYMENT RATE
The employment rate—or the proportion of the population aged 15 and older who are employed—declined 0.1 percentage points to 60.8% in August, the fourth consecutive monthly decline and the 10th decline in the last 11 months. On a year-over-year basis, the employment rate is down 1.2 percentage points.
THE LABOUR FORCE PARTICIPATION RATE
The labour force participation rate—or the proportion of the population aged 15 and older who are either working or looking for work—increased 0.1 percentage point to 65.1% in August. On a year-over-year basis, the participation rate was down 0.5 percentage points.
Jim Dimovski
Senior Vice President & Executive Partner - Vaco
"As Canada’s labour market stabilizes—and the peaks and valleys are a little less extreme—employers are continuing to be more strategic in their workforce planning, with a growing emphasis on contract work and managed services to optimize resources.
We're seeing organizations embrace flexible staffing models and outsourcing solutions, particularly in key areas like finance and tech, to drive efficiency while staying competitive in a market still riddled with uncertainty. Managed services has become a preferred talent model for organizations of all sizes and industries. This year in particular, we have seen a surge in interest given the sustained support and scalability it provides. In the last quarter of 2024, companies will continue balancing cost efficiency with innovation, as they look to ensure they remain agile and responsive to an evolving market.”
MARKET OVERVIEW
Canadian Staffing Index
AUGUST 2024
AUGUST 2023
The Canadian staffing index—which reflects the volume of labour supplied by temporary staffing agencies in Canada—was 81 in August, down 12% versus August 2023. Month-over-month, the index was flat.
Source: Association of Canadian Search, Employment & Staffing Services (ACSESS)
Kevin Jeewan
Managing Partner - Vaco
"In light of the recent trends we're observing, the Canadian staffing market has been showing subtle shifts, particularly in the contract space.
While temporary hiring remains somewhat cautious, we are seeing a slight uptick in demand for skilled contract workers, especially in the financial sector, which has demonstrated greater resilience compared to tech. Employers are still grappling with cost constraints and often try to manage internally before seeking external support. However, as the market recalibrates, the contract workforce is likely to remain a critical lever for businesses navigating economic uncertainty.”
MARKET OVERVIEW
Recession Watch 2024
'Economic Outlook Canada Q3 2024: Turning the Corner'
- After sluggish growth for the last several quarters, the Canadian economy is poised to see a moderate rebound as interest-rate cuts help fixed investment turn positive.
- The Canadian economy is expected to grow below potential for much of 2024 before rebounding in 2025 and 2026. Real GDP growth is expected to be 1.1% in 2024, 1.7% in 2025 and 2.1% in 2026.
- Given subpar domestic demand, the job market is expected to remain sluggish with unemployment averaging 6.4% in the second half of 2024 before settling back down in the 5.6%-6.0% range in the next three years.
Source: S&P Global
'Bank of Canada Cuts Key Interest Rate to 4.25%, Citing Cooling Inflation'
- In September, the central bank reduced rates to 4.25% from 4.50%—the third consecutive rate cut since June.
- The central bank says it is reasonable to expect further cuts in 2024, but the timing will depend on incoming data.
- The GDP rose 0.1% in May, meeting analysts' estimates, while economic growth in June was flat with preliminary estimates suggesting July would likely be unchanged.
- The inflation rate slowed to 2.5% on a year-over-year basis in July, down from June’s 2.7% year-over-year number.
- The consumer price index rose 0.4% in July after falling 0.1% in June, mainly driven by lower prices for travel tours (-2.8%), passenger vehicles (-1.4%) and electricity (-0.8%). On a seasonally adjusted monthly basis, the CPI rose 0.3% in July.
Sources: Reuters, Forbes, CBC, Statistics Canada
Tom Turpin
Executive Partner - Vaco
"As we look toward the remainder of 2024, Canadian businesses are positioned to navigate a unique set of challenges and opportunities. While the economy has faced headwinds, the easing of interest rates signals a potential shift toward growth in the coming quarters. But the real story for organizations will be their ability to balance caution with calculated investment.
Talent strategies will play a pivotal role in defining success, as companies look to remain competitive in an environment where skilled professionals are more selective than ever. As hiring plans evolve, organizations that prioritize both financial health and worker engagement will emerge stronger in this dynamic talent market.
By balancing cost-cutting measures with efforts to retain and support key contributors, businesses can avoid the pitfalls of disengagement and turnover. This forward-thinking approach, especially in times of uncertainty, will position organizations to better compete, retain top talent and ultimately thrive as the market stabilizes."
