Canada’s economy is shedding the quantitative easing momentum that was exorbitantly ejected throughout the Covid-19 pandemic. For a second straight month, the labour market lost tens of thousands of jobs, as 40 year-high inflation and rising interest rates took a bite out of what was a momentarily resilient economy.
Latest data from Statistics Canada paints a bleak picture of the economic landscape, which in July lost 31,000 jobs. The majority of last month’s declines were focused across the services-producing sector and the public sector, which saw employment fall by 53,000 and 51,000, respectively.
The unemployment rate remained at a steady 4.9% in July, while long-term unemployment decreased by 23,000 to 162,000, marking the third consecutive month of declines. The labour force participation rate, which measures the proportion of Canadians that are either employed or actively looking for work, was 87.9%; compared to pre-pandemic July 2019, the figure stood at 87.2%, before reaching a record-high of 88.6% in March 2022.
Statistics Canada also noted there was little indication that the tight labour market was prompting workers to voluntarily leave or switch jobs. The number of people voluntarily leaving their place of employment over the past year stood at 346,000, marking a decline of 3.4% compared to July 2019.
“This is a notoriously noisy survey, especially in the summer months, July and August. The numbers bounce around a lot. I think what’s important here is that the North American economies are slowing,” said former Statistics Canada chief economic analyst Philip Cross as cited by Bloomberg.
Information for this briefing was found via Statistics Canada and Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.