Canada's unemployment hits nine-year high

The unemployment rate in Canada hit 7% in May, the highest level in almost nine years, excluding the pandemic period. According to Statistics Canada, the number of unemployed people went up 14% compared to last year, reaching 1.6 million.

US tariff policies have had a minor impact on the Canadian labor market, Reuters notes. Although the automotive and metal industries suffered the most and experienced job cuts, there were no major layoffs.

The rise in unemployment was mainly due to weak job growth amid rising population. Although the number of jobs increased by 8,800, this figure was insignificant compared to the demographic change.

As Reuters adds, the average duration of job searches has increased to 21.8 weeks. This is 3.4 weeks longer than a year ago. Analysts note an alarming trend, with the number of long-term unemployed citizens growing, which is affecting the overall state of the country's economy.

The currency market reacted to this data with a moderate appreciation of the Canadian dollar. Investor expectations for an interest rate cut in July dropped to 33%.