Vincent Warns Low-hire Low-fire Job Market Near 30-Year Job Search Low
Nicolas Vincent said Canada’s low-hire low-fire job market has made the ability to find a job close to its lowest point in 30 years, a warning that puts the Bank of Canada in a tighter spot on interest rates. The external deputy governor delivered the message on Tuesday to policy makers and researchers at a Montreal think tank.
Vincent Flags 30-Year Job Search Low
30 years is the benchmark Vincent used for the loss of job-finding power, and he tied it to a labour market that has become less dynamic since 2022. “Today, the ability to find a job “is close to its lowest point in 30 years,”” he said.
7.1 per cent was the peak unemployment rate last fall, after Canada stood at 5 per cent at the end of 2022. Vincent said higher interest rates since late 2022 and swings in U.S. trade policy pushed employers to scale back hiring, while the layoff rate stayed low and relatively stable. That combination points to a market where firms are keeping staff rather than expanding payrolls.
Age 55 to 64 Gains, Youth Lose
Almost one percentage point is how much the employment rate for people aged 55 to 64 has risen since December 2022, according to Statistics Canada data analyzed by the bank. Employers appear to be holding on to seasoned and more qualified workers ahead of a wave of retirements, and businesses have said it is very hard to replace experienced staff.
5.5 percentage points is how far the employment rate for people aged 15 to 24 has dropped since late 2022. That gap leaves younger workers carrying the sharpest adjustment, while older workers are staying employed longer and changing jobs less often. “And people are changing jobs less often. It all creates a sense of inertia.”
Bank of Canada Rate Tradeoff
More than six months is the stretch Vincent said the share of unemployed people looking for work has never exceeded since the early 2000s. That persistence is why the central bank is trying to separate temporary weakness from structural change before setting rates.
“While monetary policy can, to some extent, help the economy transition during periods of restructuring, it cannot compensate for lower supply caused by factors such as trade friction or population aging,” Vincent said. “Moreover, if we were to stimulate demand when the issue is more structural, we could create inflationary pressures while also delaying necessary restructuring in the economy.”
For workers, the immediate shift is practical: fewer openings, longer searches, and more competition for the jobs that do appear. For rate setters, the harder call is whether weaker hiring will fade with easier policy or reflect a labour market that has changed shape since 2022.
