Unemployment rate unchanged in July, though jobless rate for young people continued to rise
Jenna Benchetrit | CBC News | Posted: August 9, 2024 12:35 PM | Last Updated: August 9
Flat jobs numbers for third consecutive month
Canada's economy shed 2,800 jobs in July while the unemployment rate was unchanged at 6.4 per cent, Statistics Canada said on Friday.
Employment fell in wholesale and retail trade, which shed 44,000 jobs, and in finance, insurance, real estate, rental and leasing, which shed 15,000 jobs. Public administration, transportation and warehousing, and utilities saw jobs gains.
The number of private sector employees fell by 42,000 in July, though private sector employment growth was up 0.6 per cent compared to this time last year.
The number of public sector employees rose by 41,000 and employment growth increased 4.8 per cent compared to 12 months earlier.
The unemployment rate also rose more for recent immigrants than it did for people who were born in Canada, with immigrant youth particularly impacted. The unemployment rate for the latter group was 22.8 per cent in July, an increase of 8.6 percentage points from a year earlier.
"We don't see a lot of job creation in Canada anymore," said Dominique Lapointe, director of macroeconomic strategy at Manulife.
Some businesses have cited high interest rates as a factor, "but at the same time, monetary policy cannot solve all of this right now," the economist said.
He pointed out that government policy around population growth and how that is integrated into the labour force are also of significance.
Economists were expecting the unemployment rate to rise as the labour market struggles to absorb rapid population growth.
Average hourly wages were up, increasing 5.2 per cent (or $1.73, for an average of $34.97) on a year-over-year basis in July — "a clip too hot" for the Bank of Canada's comfort, wrote BMO chief economist Douglas Porter.
He noted that most weak spots in the July jobs report were offset by something else, "rendering this report mostly a non-event for the Bank of Canada."
"However, the key takeaway is that employment has not grown in the past two months, the jobless rate remains almost a percentage point higher than a year ago, and it has been a really challenging summer job market for students," Porter said.
"This backdrop doesn't increase the urgency of rate cuts, but it also does nothing to dissuade them."
Unemployment rate for returning students highest since July 2009
The unemployment rate for youth 15 to 24 was 14.2 per cent in July, up 0.7 percentage points from the previous month and the highest rate seen since September 2012 (outside the pandemic years of 2020 and 2021).
Similarly, the unemployment rate for young people aged 15 to 24 who were returning to school in the fall was 17.2 per cent in July, which Statistics Canada noted is the highest rate for July since 2009 — barring the first summer of the COVID-19 pandemic.
Labour market numbers "reflect a much more difficult summer job market for young returning students in 2024 compared with previous years," the data agency wrote.
Lapointe of Manulife said that youth unemployment could be reaching crisis levels.
"They went through the pandemic, did school at home, didn't have the same opportunity to go out that maybe the previous generation had," he said.
The rate for returning students is "very worrisome" for young people just trying to get decent work experience, he added.
It also noted that the labour force participation rate had fallen by 0.3 percentage points in July to 65 per cent, largely among young men, young women and women between the ages of 25 and 54.
Twelve per cent of young people who were out of the labour force in July said that they wanted work but weren't searching for it.
That number was 2.6 percentage points higher than the same time last year, indicating that a more difficult labour market had led some to stop or pause their job search, Statistics Canada wrote.