ottawacanadas unemployment rate dropped to a fresh record low in june dipping below the 5 level and wage growth accelerated at its fastest pace in 17 months according to data that underscores tight labormarket conditions and likely provides the bank of canada leeway for a monstersized rate increase next week net employment unexpectedly dropped with nearly all the losses concentrated in the selfemployment category and among workers 55 years and older this marked the first monthly job loss since the start of the covid19 pandemic not associated with a tightening of publichealth measures statistics canada reported friday that employment in canada fell 43200 in june versus market expectations for a 20000 gain according to economists at td securities however canadas unemployment rate unexpectedly dropped to reach a record low for the fourth consecutive month to 49 from 51 when calculated using us labor department methodology canadas unemployment rate in june was 39 the data agency said the number of unemployed canadians fell by roughly 54000 in the month with both employment and unemployment falling in june the labourforce participation rate or the proportion of the workingage population who were either employed or unemployed fell 04 percentage points from may to 649 other data highlighted labormarket tightness which some economists and business owners say is posing a stiff headwind to growth as firms cant find workers to expand production average hourly wages in june rose sharply from a year ago by 52 or the biggest gain since january 2021 this builds on a comparable 39 wage gain in the prior month the involuntary parttime rate which measures the share of parttime workers who cannot find a fulltime job fell to a record low 140 in june compared to a prepandemic rate of 194 total hours worked jumped 13 in june following a slight decline in the previous month the record low unemployment rate and wage jump sets the stage for the bank of canada next week to raise its policy rate by 075 percentage points to 225  a move that traders and economists widely expect the policy rate started the year at 025 the central banks mandate is to set policy to achieve and maintain 2 inflation the annual inflation rate rose in may to 77 or a 39year high and surveys of businesses and consumers released this week by the bank of canada indicate inflation expectations moved higher in the second quarter the bank of canada said the economy is a state of excess demand in which the production of goods and services cant keep up with consumer needs the bank of canada said rate increases are required to bring demand and supply into balance demand is being fueled by labormarket gains as well as excess savings accumulated during the pandemic the job report indicated that the ranks of the selfemployed  which accounts for freelancers and independent contractors  declined by over 59000 publicsector employment was largely unchanged and the private sector added nearly 17000 workers the biggest decline in jobs was recorded in the retail sector data over the coming months will shed light on whether employment in this industry might be impacted by any changing consumer behaviours associated with inflation and canadians ability to meet daytoday expenses statistics canada said meanwhile the construction sector added 23000 jobs and factory owners hired 26300 new employees