Canada’s economy lost a net 2,800 jobs last month and the country’s unemployment rate remained at a 30-month high of 6.4%, largely due to low labour participation and rapid population growth.
While analysts had predicted the unemployment rate to increase from 6.3% to 6.5% in June, due to Canada’s population growth outpacing the job market, they also forecast a net gain of 22,500 new jobs, however, that was not the case.
Excluding the pandemic, the participation rate of Canada’s labour force dropped to a 26-year low of 65% last month, reflecting that a large cohort of people in Canada are not looking for work.
“A more difficult labour market for young people may lead some to stop or pause their job search,” said Statscan in its July Labour Force Survey.
According to the data, “employment fell in wholesale and retail trade as well as in finance, insurance, real estate, rental and leasing in July.”
However, employment increased in “public administration, transportation and warehousing and utilities.”
Among recent immigrants, (those who’ve emigrated to Canada within the last five years) unemployment is up 3.1% last month compared to July 2023.
“The increase was particularly notable for recent immigrant youth; the unemployment rate for this group was 22.8% in July, up 8.6 percentage points from one year earlier. For recent immigrants in the core working age, the unemployment rate rose by 2.0 percentage points to 10.4% over the same period,” reads the survey.
“In comparison, the unemployment rate for people born in Canada was up 0.5 percentage points to 5.6% on a year-over-year basis in July, while the rate for more established immigrants (who had landed in Canada more than five years earlier) was up 1.2 percentage points to 6.3%.”
Provincially, employment declined in Manitoba and Nova Scotia but increased in Ontario and Saskatchewan.
Total hours worked also increased by 1%, compared to July of last year.
Employment in the private sector declined by 0.3%, losing 42,000 jobs in July, while public sector employment increased by 0.9%, gaining 205,000 jobs.
“Public sector employment gains over the last year have been led by increases in health care and social assistance (+87,000; +6.9%), public administration (+57,000; +4.8%) and educational services (+33,000; +3.3%),” reads the data.
While self-employment saw little fluctuation in July, it increased by 2.1% on a year-over-year basis.