Background on the Situation
Canada’s unemployment rate has surged to 7.0% in May, the highest level since 2016 excluding the Covid-19 pandemic. This rise is primarily due to job losses in sectors most affected by the trade war initiated by former U.S. President Donald Trump.
Statistics Canada’s Report
According to Statistics Canada, the country’s statistical agency, there were 1.6 million unemployed individuals in a population of 41.6 million during May.
This represents a 13.8% increase compared to the same month last year and marks the highest unemployment rate Canada has recorded in a decade, excluding 2020 and 2021 when the pandemic significantly disrupted the labor force.
Impact on Specific Sectors
Claire Fan, Senior Economist at the Royal Bank of Canada, highlighted that the data underscores the early effects of Trump’s tariffs.
“The sectors most exposed to trade headwinds, namely manufacturing and transportation & warehousing, experienced job losses,” Fan explained.
Fan specifically mentioned Windsor, a city central to Canada’s automotive industry directly impacted by Trump’s tariffs, where the unemployment rate reached nearly 11% in the previous month.
Economic Resilience
Despite the job losses, employment figures surpassed expectations of certain analysts, indicating resilience in the Canadian economy.
Key Questions and Answers
- What is the current unemployment rate in Canada? The unemployment rate has risen to 7.0% in May, the highest since 2016, excluding the Covid-19 pandemic.
- Which sectors are most affected by the trade war? The manufacturing and transportation & warehousing sectors have experienced significant job losses.
- How many people are currently unemployed in Canada? Statistics Canada reported 1.6 million unemployed individuals out of a population of 41.6 million.
- Is the Canadian economy showing signs of resilience? Despite job losses, employment figures surpassed analyst expectations, suggesting economic resilience.
