Economy lost 2,800 jobs in July, unemployment rate unchanged at 6.4%

Students are facing a particularly challenging summer job market while recent immigrants are disproportionately affected by weakening labour market conditions in the country, Statistics Canada’s latest employment figures show.

The federal agency’s July labour force survey released on Friday (August 9) says the overall jobless rate held steady at 6.4% last month as the economy shed a modest 2,800 jobs.

Amidst historically high interest rates, the unemployment rate has climbed 0.9 percentage points over the last year.

The latest data suggests young people and recent immigrants, however, have been among the most affected by the deteriorating conditions.

Of the students between the ages of 15 and 24 returning to school in the fall, 51.3% of them were employed last month, down a staggering 6.8 percentage points from a year ago.

Statistics Canada says that’s the lowest employment rate for returning students since July 1997, outside of July 2020 during the COVID-19 pandemic.

The slowdown in the Canadian job market has also been particularly felt by recent immigrants, as their unemployment rate has climbed 3.1 percentage points on an annual basis to 12.6% in July.

By comparison, the unemployment rate for people born in Canada rose 0.5 percentage points over the last year to 5.6% in July.

The increase in unemployment is particularly stark for recent immigrant youth, who face a jobless rate of 22.8%. That’s up 8.6 percentage points from a year ago.

The Bank of Canada has signalled that it’s increasingly concerned about job market conditions.

Governor Tiff Macklem said last month that the central bank’s decision to cut its key interest rate again was driven in part by a desire to boost economic growth.

The Bank of Canada’s summary of deliberations released earlier this week suggested some members of the governing council are worried further deterioration in the labour market could hinder that process.