2024-08-09 22:06:51
Statistics Canada observed that students faced a particularly difficult job market this summer, while new immigrants were affected by the overall slowdown in the job market.
That’s what the federal agency came up with Friday morning in its latest labor force survey, where we also learned that the country’s unemployment rate held steady at 6.4% last month while the economy lost a modest 2,800 jobs.
In Quebec, employment also remained virtually unchanged, with the unemployment rate remaining at 5.7 per cent.
However, the employment rate, which measures the share of people aged 15 and over who are working, fell slightly nationwide as fewer people looked for work.
“Canadian employment was little changed for the second straight month, disappointing expectations for a modest gain of 25,000 jobs,” TD Bank senior economist Leslie Preston wrote in a note to TD Bank clients.
The unemployment rate has risen 0.9 percentage points over the past year as the Bank of Canada has kept its key interest rate high.
However, the latest data shows that young people and recent immigrants are among the groups most affected by the deteriorating job market conditions.
Among students aged 15 to 24 who returned to school in the fall, the employment rate was 51.3% in July, down 6.8 percentage points from last year.
According to Statistics Canada, this is the lowest rate for this type of worker since July 1997 (except for July 2020 during the COVID-19 pandemic).
New immigrants are also feeling the slowdown in the labor market, with the unemployment rate rising 3.1 percentage points year-on-year to 12.6% in July.
In contrast, the unemployment rate for the Canadian-born population rose by 0.5 percentage points over the same period to 5.6% last month. The unemployment rate for young immigrants was 22.8%, up 8.6 percentage points from last year.
Data sources worth noting
However, the slowing labor market does not appear to have affected wage growth, with average hourly earnings continuing to rise at a healthy pace, up 5.2% year-over-year in July.
Still, the Bank of Canada has acknowledged growing concerns about labor market conditions. Governor Tiff Macklem said a few weeks ago that the central bank’s decision to further cut its key interest rate was driven in part by a desire to stimulate economic growth.
A summary of the Bank of Canada’s deliberations released earlier this week showed that some members of the Governing Council were concerned that a further deterioration in the labour market could slow progress.
“The minutes from last month’s Bank of Canada monetary policy decision highlighted growing concerns about labour market conditions, and even though the unemployment rate remains stable, today’s data will do little to allay those concerns,” wrote Andrew Grantham, senior economist at CIBC.
According to him, CIBC expects three more rate cuts this year, or one for each decision scheduled on the calendar.
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