Economic growth 

The Canadian economy avoided a recession in 2023, but growth slowed in the second half of the year. A stronger than expected US economy boosted Canadian exports in the last three months of 2023, reversing the negative growth experienced in the third quarter. Real GDP grew in January and February of 2024. The Bank of Canada currently forecasts that Canadian economic growth will be 1.5% in 2024 and 2.2% in 2025. 

Jobs 

Canada’s unemployment rate has increased from 5.1% in April 2023 to 6.1% in April 2024. The unemployment rate has risen for workers in all age groups. For core-aged workers (25–54), racialized workers have seen a larger increase in unemployment rates. The unemployment rate for core-aged Black workers increased from 6.8% in April 2023 to 11.2% in April 2024. The unemployment rate for core-aged South Asian workers increased from 4.7% to 6.8% and for core-aged Chinese workers from 6.2% to 7.5%. Over the same period, the unemployment rate for non-racialized workers increased from 3.9% to 4.2%. 

Wages 

Statistics Canada uses two sources to estimate wages each month: the Labour Force Survey (LFS) and the Survey of Employment, Payroll and Hours (SEPH). The LFS information comes from individuals filling out a survey, with results available the following month. The SEPH gets its data from a census of business payrolls. The SEPH data takes longer to process, so the information lags by two months. The two surveys often differ slightly, but usually show the same long-term trends. For February 2024, both the LFS and the SEPH show that per-worker average weekly wages increased by 4.5% compared to a year earlier. 

Inflation 

The Consumer Price Index (CPI), which measures changes in the cost of goods and services, rose by 2.7% in April compared to the previous year. This is a slight decrease from 2.9% in March. Housing prices for both renters and owners are still increasing faster than overall inflation, at 6.4%. The Bank of Canada expects the CPI to drop to 2.5% by mid-2024 and return to 2% by early 2025. 

Interest rates 

The Bank of Canada lowered interest rates to 4.75% on June 5, 2024, due to slowing inflation and other economic indicators, such as employment and business investment. Previously, the BoC had kept interest rates steady at 5% since July 2023. Economists will be closely monitoring the housing market and business investment to see how quickly they respond to this change in borrowing costs. The next announcement will be on July 24, 2024.