Canada’s economy has lost jobs for 2 months in a row, 74,000 fewer since May | CBC News

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Canada’s economy lost 30,600 jobs in July, Statistics Canada said on Friday.

It is the second straight month of job losses, coming on the heels of the 43,000 jobs lost in June. Economists had expected the economy to make a slight gain of around 15,000 jobs, but instead the source of employment shrank.

Goods-producing industries actually added about 23,000 jobs during the month, but that relative strength was more than offset by a huge loss of 53,000 jobs in the service sector.

The health sector was a major drag, as it lost 22,000 jobs. After more than two years of caring for Canadians during a pandemic, job burnout and turnover in the sector is becoming a major issue.

Job offers in the health sector

More than 10 percent of all nurses called in sick at least once during the month, and more than 20 percent worked paid overtime to make up for it, the data agency said.

Nursing vacancies at the beginning of 2022 were more than triple the level of five years earlier, Statistics Canada said.

“The decline in health care employment has not gone unnoticed, as it is due to voluntary resignations rather than layoffs,” said economist Tu Nguyen of accounting and consulting firm RSM Canada.

“The exodus of burnt out health care workers has led to an increase in the temporary closure of emergency rooms,” he said in an emailed statement. “This has wide ramifications, [because] When people are not being cared for, workers in all industries are called in sick, have to take time off to care for sick family members, or even leave the workforce in more extreme circumstances.”

Despite the drop, the unemployment rate held steady at its record low of 4.9 percent, because while there were fewer jobs, there were also fewer people looking for work.

At the end of July, the data agency says there were about a million people in Canada officially classified as unemployed, meaning they want a job but don’t have one.

Another 426,000 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 million people out of work compares with the 19.5 million Canadians who had some form of paid work during the month.

Canada’s soft labor market contrasts sharply with that of the US, where the economy added 528,000 jobs last month. That’s double what economists expected.

While the monthly jobs number is always volatile, and especially so in the summer months, Tiago Figueiredo, an economist at Desjardins, says the disappointing number suggests “Canada’s labor market hit the brakes 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 across the board, many sectors are expanding strongly, such as aviation, says Arvin Nagules of Menzies Aviation. (CBC)

Demand for workers in the air travel and tourism sectors

While the economy has fewer workers today than it did in May, many sectors and employers report that hiring remains strong. The tourism sector was perhaps hit 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 as many as 1,000 people across the country, even as the overall economic outlook darkens.

“We believe we need to continue hiring positions and roles [because] we see demand from Canada in the coming years to remain 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 made as many hires in the last two or three months as they normally would 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 the job market

Economist Brendon Bernard of job search firm Indeed is taking the monthly drop with a grain of salt, noting that the decline is within the 34,000 margin of error for the StatsCan employment survey, but it’s clear something is changing. In the labor market.

“Instead of showing up in higher unemployment, recent soft employment numbers have shown up in declining labor force participation,” he said.

More than 200,000 people have dropped out of the labor force since March, and the participation rate among people of working age fell 0.2 percentage point to 64.7 percent. That means less than two-thirds of working-age people even in theory want a job.

“It’s not what we would expect from a wave of layoffs [but] At the same time, the earnings pace from earlier this year seems to have run out of gas,” Bernard said.

“Now the question is whether the car will stay in neutral.”

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