Canada's job market remained stagnant in July, with youth and immigrants facing rising unemployment
Canada’s labour market displayed signs of strain in July, with the unemployment rate holding steady at 6.4 percent and the economy losing approximately 2,800 jobs, according to Statistics Canada.
Despite the unchanged unemployment rate, the employment rate—the proportion of the population aged 15 and older who are employed—fell by 0.2 percent to 60.9 percent, continuing a downward trend observed since early 2023.
Job losses were primarily concentrated in wholesale and retail trade, which shed 44,000 jobs, and in finance, insurance, real estate, rental, and leasing, which lost 15,000 jobs, as reported by Financial Post.
Conversely, public administration added 20,000 jobs, and transportation and warehousing saw an increase of 15,000 jobs, partially offsetting declines from previous months.
Youth and recent immigrants were particularly impacted by the deteriorating job market. Statistics Canada noted that the unemployment rate among youth aged 15 to 24 rose to 14.2 percent, the highest level since September 2012, excluding the pandemic years.
For returning students, the employment rate plummeted to 51.3 percent, the lowest for July since 1997, outside of the pandemic, according to BNN Bloomberg. The unemployment rate for this group surged to 17.2 percent, a significant increase from previous years.
Recent immigrants faced similar challenges, with their unemployment rate climbing by 3.1 percent to 12.6 percent, as per Statistics Canada. The situation was even more dire for immigrant youth, whose jobless rate jumped to 22.8 percent, an 8.6 percent increase compared to the previous year.
In contrast, the unemployment rate for Canadian-born individuals rose by only 0.5 percent to 5.6 percent over the same period.
The private and public sectors also experienced contrasting trends. Private sector employment declined by 42,000 jobs in July, while the public sector saw an increase of 41,000 jobs, according to Financial Post.
Over the past year, the public sector added 205,000 jobs, outpacing the 86,000 jobs gained in the private sector.
Regionally, employment changes were mixed. Ontario added 22,000 jobs, driven by gains in full-time employment, while Manitoba and Nova Scotia saw declines of 5,400 and 4,800 jobs, respectively. Saskatchewan experienced a modest gain of 6,700 jobs.
Wage growth remained robust, with average hourly wages rising by 5.2 percent on a year-over-year basis, reaching $34.97. Despite this, the labour force participation rate fell to 65.0 percent, the lowest since June 1998, excluding the pandemic years.
The Bank of Canada has expressed concern about the weakening labour market, which could hinder economic growth. The central bank's governor, Tiff Macklem, cited deteriorating job market conditions as a factor in the recent decision to cut interest rates.
As Canada’s labour market faces growing challenges, the outlook remains uncertain, particularly for vulnerable groups like youth and recent immigrants. With job losses concentrated in key sectors and significant regional disparities, the economic landscape appears increasingly complex.
