“Canada’s Unemployment Rate Hits 7.1%, Shedding 66,000 Jobs”

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Canada experienced a notable increase in unemployment, with the economy shedding 66,000 jobs in August, according to the latest data from Statistics Canada. The unemployment rate climbed by 0.2 percentage points to 7.1%, a level not seen since May 2016 excluding the pandemic years of 2020 and 2021. This upward trend in the unemployment rate has been consistent throughout the year, rising from 6.6% in January.

Most of the job losses were in part-time positions, driven by reduced hiring and increased layoffs, as highlighted by Statistics Canada. The layoff rate rose to 1% in August, up from 0.9% the previous year. The data reveals a more severe situation than anticipated by some economists, who had predicted a gain of 10,000 jobs and an unemployment rate of 7%.

Statistics Canada reported that the majority of the lost jobs, around 60,000, were part-time roles, while full-time employment saw minimal changes. The workforce aged between 25 and 54 bore the brunt of the losses, with youth employment remaining relatively stable. The report’s findings were deemed concerning by Pedro Antunes, Chief Economist at The Conference Board of Canada, who emphasized the impact on the core working-age group.

The participation rate, indicating the proportion of individuals actively engaged in the economy, reached its lowest point since the pandemic at 65.1%. Industries exposed to tariffs were significantly affected, with declines in employment seen in transportation, manufacturing, and scientific and technical services sectors. Notably, regions like Windsor and Oshawa in Ontario reported high rates of unemployment.

Despite some sectors facing challenges, the construction industry saw an increase of 17,000 jobs. Chief Economist at BMO Capital Markets Douglas Porter highlighted the economic strain caused by trade uncertainties, leading to potential rate cuts by the Bank of Canada. Market expectations leaned towards a rate reduction given the weak job market data.

In the United States, the labor market also struggled, with a rise in unemployment to 4.3% and minimal job additions. Youth unemployment in Canada remained high at 14.5%, though it saw a slight decline from the previous month. Gen Z individuals faced challenges finding employment, with the summer marked by high unemployment rates for students.

Factors such as gig work, artificial intelligence, and population growth were cited as contributors to the challenging job market for young Canadians. The aftermath of the pandemic recovery period has posed difficulties for youth employment, with the gig economy and evolving job landscape presenting barriers to entry for younger individuals.

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