(Bloomberg) — The number of Canadians receiving unemployment benefits in January rose 18% compared to a year earlier, marking the fourth straight month that it was higher than the pre-pandemic level.
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On a monthly basis, Canadians on employment insurance, known as EI, rose 0.3% to 468,300 in January, Statistics Canada reported Thursday. Core working-age recipients, aged 25 to 54, increased by 19.6% on the year.
The average number of EI recipients in 2019 was about 450,000. The number spiked between March 2020 and May 2022 while Covid-19 supports were in place, reaching a peak of nearly 1.7 million in May 2021. It fell below the pre-pandemic average between September 2022 and September 2023, but has been rising above that baseline ever since.
The data add to evidence that the Canadian labor market is softening. While job gains came in higher than expected last month, they have not been keeping up with rapid population growth, and recent gains have been concentrated in the public sector. The unemployment rate has risen to 5.8%, wage growth has cooled and job vacancies have fallen for six straight quarters.
When the Bank of Canada held its key interest rate at 5% earlier this month, it noted in a statement that the labor market has come into better balance and there are “some signs” that wage pressures may be easing.
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