Canada’s economy lost 30,600 jobs in July, Statistics Canada said Friday.
It is the second consecutive month of job losses, following the 43,000 job losses in June. Economists had expected the economy to gain a slight increase of about 15,000 jobs, but instead the job pool shrank.
Goods-producing industries actually added about 23,000 jobs during the month, but that relative strength was more than offset by a large loss of 53,000 jobs in the services sector.
The healthcare sector was a big hit, losing 22,000 jobs. After more than two years of caring for Canadians during a pandemic, attrition and job losses in the industry are becoming a major issue.
Job exchange in the health sector
More than 10 percent of all nurses called in sick at least once a month, and more than 20 percent worked paid overtime to make up for it, the data agency said.
Nursing vacancies at the start of 2022 were more than triple the level five years earlier, Statistics Canada said.
“The decline in health care employment has not gone unnoticed, as it has been due to voluntary resignations rather than layoffs,” said economist Tu Nguyen of accounting and consulting firm RSM Canada.
“The exodus of burned health care workers has led to an increase in the temporary closure of emergency rooms,” he said in an emailed statement. “This has far and wide ramifications, [because] when people are not taken care of, it causes workers in all industries to call in sick, have to take time off to care for sick family members, or even leave the workforce in more extreme circumstances.” .
Despite the decline, the unemployment rate held steady at an all-time low of 4.9 percent, because while there were fewer jobs, there were also fewer people looking for work.
As of the end of July, the data agency says there were about one million people in Canada officially classified as unemployed, meaning they want a job but don’t have one.
About 426,000 more people wanted work but did not look for it during the month, so they are not officially counted among the ranks of the unemployed. The one million people out of work compares to the 19.5 million Canadians who had some form of gainful employment during the month.
Canada’s soft labor market is in stark contrast to the US, where the economy added 528,000 jobs last month. That’s double what economists expected.
While the monthly employment figure is always volatile, and especially so during the summer months, Desjardins economist Tiago Figueiredo says the underwhelming number suggests the “Canadian labor market slowed down in July.”
“That said, the labor market remains tight and there is room for further weakness in employment as economic growth slows.”
While the economy is shedding jobs overall, many sectors are expanding strongly, including aviation, says Menzies Aviation’s Arvin Nagules. (CBC)
Demand for workers in the air travel and tourism sectors
Although the economy has fewer workers today than in May, many sectors and employers report that hiring remains robust. The tourism sector was hit perhaps harder than any other sector by the pandemic, but as demand returns, so does the need for workers.
Laura Pallotta, vice president of Marriott Hotels, says the chain is currently trying to hire up to 1,000 people nationwide, even as the overall economic outlook darkens.
“We believe we need to continue to hire for back-end positions and roles [because] we see that demand from Canada over the next few years will continue to be strong,” he told CBC News in an interview.
Arvin Nagules, senior vice-president of Menzies Aviation, which provides a variety of airport services in Canada and abroad, says his industry is also trying to rapidly increase staffing levels.
He says airlines and airports have done as much hiring in the past two to three months as they would normally do in several years. “It’s not just the airline industry. Everyone is fighting for the same group of people,” he said in an interview.
Changing job market
Economist Brendon Bernard of job search firm Indeed is taking the monthly drop with a grain of salt, noting that the drop is within the 34,000 margin of error for StatsCan’s labor survey, but is clearly something is changing in the labor market.
“Instead of showing higher unemployment, the recent soft job numbers have shown a decline in labor force participation,” he said.
More than 200,000 people have left the workforce since March, and the working-age participation rate fell 0.2 percentage points to 64.7%. This means that less than two-thirds of people of working age even theoretically want a job.
“It’s not what we expected from a wave of layoffs [but] at the same time, the pace of gains earlier this year appears to have run out of gas,” Bernard said.
“Now the question is whether the car will stay in neutral.”