Canada's employment dips slightly in July as labour market remains stagnant

Despite these losses, the national unemployment rate reportedly held steady at 6.4 per cent, marking the highest rate in 30 months. This figure underscores broader economic challenges Canada is facing amid ongoing economic uncertainty.

The loss of jobs in July followed a similar trend from June, when Canada also reported a slight decline in employment figures. The modest job losses in July were primarily driven by a significant decline in part-time positions, which fell by 64,000. However, this was nearly offset by a surge in full-time employment, which saw an increase of 62,000 jobs. The net effect left overall employment relatively unchanged.

Certain sectors were hit particularly hard. The wholesale and retail trade sector saw the most significant job losses, with 44,000 positions disappearing. Similarly, the finance, insurance, and real estate sectors recorded a decline of 15,000 jobs. These losses were somewhat mitigated by gains in public administration and transportation, where job growth was more robust.

The labour market challenges were not uniformly distributed across demographics. Young Canadians, particularly students returning to the workforce, faced an especially difficult job market. The employment rate for students aged 15 to 24 dropped by 6.8 percentage points compared to the same period last year, now sitting at 51.3 per cent—the lowest level since 1997, excluding the pandemic period. Additionally, recent immigrants also struggled, with their unemployment rate rising by 3.1 percentage points over the past year.

The labour force participation rate, which indicates the percentage of people working or actively seeking work, fell by 0.3 percentage points to 65 per cent in July. This marks the lowest participation rate since June 1998, excluding the pandemic years, suggesting that more Canadians might be becoming discouraged by the challenging job market.

Economists suggest that these figures reflect a cooling economy and anticipate that the Bank of Canada may consider further interest rate cuts in response to the ongoing labour market weakness. However, with average hourly wages rising by 5.2 per cent year-over-year, there are concerns that persistent wage growth could complicate efforts to bring inflation down to the central bank's target of 2 per cent.

As the economy continues to navigate these uncertainties, the latest employment data offers a mixed picture—while full-time work and overall employment remain relatively stable, the significant losses in part-time work and the challenges faced by specific demographic groups signal that Canada’s labour market is far from robust.

Sources:

• Statistics Canada
• Global News
• Lethbridge Herald
• BNN Bloomberg