The Canadian economy saw minimal change in June, losing 1,400 jobs, while the unemployment rate rose by 0.2 percentage points to 6.4%, according to Statistics Canada. Over the past year, the unemployment rate has increased, with 1.4 million people unemployed in June, the agency’s Labour Force Survey reported.
Of those unemployed in May, 20% found employment by June, though this is lower than the pre-pandemic average for the same period.
There were job losses in the transportation, housing, and public administration sectors, while gains were seen in food services, accommodation, and agriculture. Unemployment rates for Black and South Asian Canadians aged 25 to 54 also rose, with Black Canadians seeing a 4.4 percentage point increase to 11.9%, and South Asian Canadians a 1.7 percentage point rise to 6.7%. These figures are not seasonally adjusted.
Average hourly wages increased by 5.4% in June compared to the same time last year, up from a 5.1% rise in May.
BMO economist Douglas Porter noted that the labour market is weakening, increasing the likelihood of a Bank of Canada rate cut. However, rising wages could cause hesitation for such a move.
Youth unemployment, for those aged 15 to 24, rose by 0.9 percentage points to 13.5% in June, the highest since September 2014, excluding the pandemic years.
Economist Brendon Bernard from Indeed Canada stated that youth are particularly sensitive to job market fluctuations, benefiting when the market is strong and suffering when it weakens. Over the past year, the job market has deteriorated, particularly for those aged 15 to 24.
The summer job market has also become challenging for students, with the employment rate for returning students falling to 46.8%, the lowest since June 1998, except for June 2020. This is a significant decline from the 53.7% rate in June 2022.
Christian Kyle, student union president at the University of British Columbia, mentioned that many UBC students are struggling to find summer work due to high living costs in Vancouver.
The unemployment rate for returning students rose to 15.9%, an increase of 3.8 percentage points from the previous year. Avery Shenfeld, chief economist at CIBC Capital Markets, suggested this is likely a temporary issue related to the lack of traditional summer jobs. Last summer saw a high demand for workers in restaurants, bars, and airports, which is not the case this year. However, Shenfeld noted that the current difficulty in finding summer jobs might not affect students long-term.
