In July, the Canadian economy experienced a decline of over 40,000 jobs, resulting in a decrease in the employment rate to its lowest level in eight months, according to Statistics Canada. Despite this, the unemployment rate remained steady at 6.9%, marking a multi-year high.
The job losses represented a significant reversal from the previous month when 83,000 jobs were added, leading to an employment rate of 60.7%. Statistics Canada noted that the decrease in jobs primarily affected permanent employees, marking the lowest employment rate since the onset of the pandemic.
Economists had anticipated an addition of 13,500 jobs in July, with the unemployment rate expected to rise to seven percent. BMO chief economist Douglas Porter characterized the latest data as reflecting a weak start to the third quarter, attributing the soft economic performance to trade uncertainties.
The decline in employment was particularly pronounced among individuals aged 15 to 24, with this demographic experiencing a drop in the employment rate to 53.6% – the lowest since November 1998 excluding the pandemic period. Youth unemployment also rose to 14.6%, the highest level since September 2010, with challenges exacerbated for high school students seeking employment.
Several sectors faced significant job losses in July, with the information, culture, and recreation industry shedding 29,000 jobs, construction losing 22,000 jobs, and business support services seeing a decline of 19,000 jobs. On a positive note, transportation and warehousing saw an increase of 26,000 jobs during the same period.