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The Canadian economy saw an unexpected drop in employment in July. The market development was affected by part-time jobs, which fell sharply. However, the unemployment rate remained at the same level, while analysts expected it to rise.
Canada lost 2,800 jobs in July, according to Statistics Canada. The result was surprising because economists contacted by Reuters expected new jobs to be created.
Unexpected developments in Canada’s labour market have impacted part-time positions, many of which have disappeared. Conversely, the number of full-time positions has increased, but the growth has not been enough to make up for the growth in the part-time job sector.
On the other hand, the unemployment rate remained at 6.4%, while analysts expected it to rise. This level is already the highest in 2.5 years, and the level in January 2022 was even higher, reaching 6.5%.
The labour market is not adequate to absorb Canada’s population growth
Analysts expect the unemployment rate to be just 6.5%, despite their estimates of new job creation. They are based on a rapid increase in the number of Canadian residents, which the labour market cannot absorb. According to Statistics Canada, the current labour market results are due to a large number of people not looking for work in July.
July marked the second straight month of job losses in the country. Economists said the data could be another reason for the central bank to cut interest rates at its next meeting in September. In June, the Fed cut rates for the first time in more than four years, and then cut them at its next meeting in late July.
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