The Canadian economy lost 30,600 jobs in July, Statistics Canada said Friday.
It is the second month in a row that jobs have been lost, after the 43,000 jobs lost in June. Economists had expected the economy to generate a slight increase of about 15,000 jobs, but employment contracted instead.
The goods-producing industries 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 service sector.
The healthcare sector was a major drag as it lost 22,000 positions. After more than two years of caring for Canadians during a pandemic, industry burnout and job turnover are becoming a major problem. More than 10 percent of all nurses called in sick at least once a month, and more than 20 percent paid overtime to make up for it, the data agency said.
Nursing job opportunities were more than three times as high as five years earlier in early 2022, according to Statistics Canada.
“The health care job losses have not gone unnoticed, as it was due to voluntary departures rather than layoffs,” said economist Tu Nguyen of accounting and consulting firm RSM Canada.
“The exodus of burnt-out health workers has led to a wave of temporary emergency room closures. This has far-reaching consequences, [because] Failure to care for people results in workers in various industries calling in sick, taking time off to care for sick relatives, or even leaving the workforce in more extreme circumstances.”
Despite the decline, the unemployment rate remained stable at the record low of 4.9 percent, because while jobs were fewer, there were also fewer people looking for work.
At the end of July, about a million people in Canada were officially classified as unemployed, meaning they want a job but don’t have one, according to the data agency. Another 426,000 people wanted a job but did not look for one that month, so they are not officially classified as unemployed.
The roughly one million unemployed compare to 19.5 million Canadians who had some sort of paid work during the month.
Canada’s weak job market contrasts sharply with that of the US, where the economy created 528,000 jobs last month. That is twice as much as economists had expected.
While monthly job numbers are always volatile, especially in the summer months, Tiago Figueiredo, an economist at Desjardins, says the disappointing number suggests Canada’s “labor market put the brakes on in July.”
That said, the labor market remains tight and there is scope for further weakening in employment as economic growth slows.
While the economy has fewer workers today than in May, many industries and employers report that hiring remains robust. The tourism industry may have been hit harder than any other by the pandemic, but as demand returns, so will the need for workers.
Laura Pallotta, vice president at Marriott Hotels, says the chain is currently trying to hire as many as 1,000 people across the country, even as the overall economic outlook darkens.
“We believe we should continue to take backup positions and roles [because] we see demand for Canada continuing to be strong in the coming years,” she told CBC News in an interview.
Arvin Nagules, senior vice president at Menzies Aviation, which provides a variety of airport services in Canada and abroad, says his industry is also trying to ramp up its workforce quickly.
He says airlines and airports have hired as many people in the past two or three months as they normally have in a number of years. “It’s not just the airline industry. Everyone is fighting for the same group of people,” he said in an interview.
Economist Brendon Bernard of job-seeking firm Indeed takes the monthly decline with a grain of salt — noting that the drop is within the 34,000 margin of error for Statscan’s job survey — but it’s clear that something is changing in the job market.
“Instead of appearing in higher unemployment, the recent soft job numbers have instead emerged in declining employment rates,” he said. “Not what we would expect from a wave of layoffs [but] at the same time, the pace of earnings from earlier this year seems to be slowing down.”
“Now the question is whether the car will remain in neutral.”