Canada posts flat July jobless rate of 6.4%

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Ottawa, Canada — Canada’s unemployment rate held steady at 6.4 percent in July, while job losses continued a second month in a row, the national statistical agency said Friday.

Statistics Canada said 2,800 net jobs were shed in the month, following 1,400 lost in June. Analysts had forecast a gain of 25,000 jobs.

July weakness in the private sector, particularly wholesale and retail trade, was offset by gains in the public sector.

READ: Canada unemployment rate climbs

Losses were also recorded in finance, insurance, real estate, as well as rental and leasing, while employment increased in transportation and warehousing, and utilities.

A sharp drop in the labor force participation rate to its lowest level since 1998 (excluding during pandemic labor disruptions in 2020 and 2021) came alongside surging population growth.

Aging baby boomers leaving the workforce have put steady downward pressure on the participation rate over recent years, but the decline in July was mostly due to youth becoming discouraged by tough labor market conditions.

Canada’s population surpassed 41 million on April 1, up by one million in the previous 10 months, buoyed by strong immigration.

The proportion of the population who were either working or looking for work fell 0.3 percentage points to 65.0 percent in July.

“The labor market is weak, but it’s not falling off a cliff –- at least not yet,” Desjardins analyst Royce Mendes commented in a research note.

He and other economists predicted Canada’s central bank would continue cutting rates at its upcoming meetings.