Canada’s unemployment rate held steady at 6.4 per cent in July, with the economy shedding about 2,800 jobs. This soft monthly reading has economists predicting continued interest rate cuts by the Bank of Canada. The data from Statistics Canada revealed that the biggest declines in employment were seen in wholesale retail trade and finance, real estate, and insurance sectors. On the other hand, public administration and transportation and warehousing saw gains, offsetting some of the losses.
Despite the monthly fluctuations, on an annual basis, jobs were up by 346,000 compared to the previous year. However, the youth unemployment rate rose to 14.2 per cent, with returning students facing an even higher rate of 17.2 per cent. This challenging summer job market for students has been attributed to the difficulties in finding employment opportunities.
Recent immigrants also faced challenges, with the unemployment rate jumping to 12.6 per cent compared to the previous year. Among immigrant youth, the unemployment rate was even higher at 22.8 per cent. The overall employment rate declined in July, with a decrease in part-time work and an increase in full-time work. However, the number of part-time jobs created over the last year has outpaced full-time jobs.
The participation rate also fell to its lowest point since 1998, excluding the pandemic. This decline in the labour market has led economists to predict further rate cuts by the Bank of Canada. The private sector saw a decline in employment, while the public sector added jobs. Wage growth decelerated slightly in July, which could impact inflation rates.
Looking ahead, economists anticipate four straight rate cuts by the Bank of Canada by the end of the year and into 2025. The central bank is expected to continue lowering rates to support the economy and address the challenges in the labour market. Overall, the Canadian economy is facing weaknesses that may require further intervention to stimulate growth and employment opportunities.