Canadian workers are changing jobs less frequently, another indicator that the labour market is softening as businesses feel the pressure of higher interest rates.
The job-changing rate reflects the proportion of workers who remained employed from one month to the next but who changed jobs in-between. It’s a barometer for the health of the labour market. A higher rate suggests that workers are confident in their ability to find new work, and switching jobs typically means employees are able to negotiate higher wages.
The latest labour market data show that the demand for labour is easing. As of August 10, Canadian job postings on Indeed were down 23 per cent from a year earlier, while still up 25 per cent compared to pre-pandemic levels, as per the company’s second-quarter survey that gathered 10,000 responses. Historically, the number of people switching jobs tends to decrease ahead of recessions, reflecting workers’ fears around unfavourable labour conditions. For this reason, the job-changing rate provides insight into labour market psychology heading into challenging economic times, Thomas Lemieux, professor at the Vancouver School of Economics at the University of British Columbia, said in an interview.
Looking at the metrics that the BoC uses to evaluate the strength of the labour market, most remained above or in line with a range of benchmarks, except for the job finding rate, which stood at 21.9 per cent in July, closer to its historical lowest of 19.5 per cent. This rate indicates that people are currently less likely to move from unemployment to employment.