Trump’s division tariffs on steel, aluminum and automobiles have been hit hard by the manufacturing sector, resulting in a decline in adoption.
The Canadian economy lost tens of thousands of jobs in July and sent the share of employed people down eight months as the labor market returned the profits seen in the previous month.
Statistics Canada said Friday that in June, 83,000 jobs added 83,000 jobs, eliminating 40,800 jobs compared to an increase in the employment rate or total population of the working-age population to 60.7%.
However, the unemployment rate remained stable at a multi-year high of 6.9%.
Analysts voted by Reuters predicted that the economy would add 13,500 jobs and unemployment would reach up to 7%.
“The Canadian labor market returned to reality in July,” wrote Michael Davenport, a senior economist at Oxford Economics, in a memo.
US President Donald Trump’s tariffs in the steel, aluminum and automobile sector have been hit hard by the manufacturing sector, reducing the intention to hire companies, the Bank of Canada has previously said.
The number of people employed in manufacturing was reduced by nearly 10,000 in July as sectors related to steel, aluminum and karmaking reduced employment and experienced layoffs.
Marty Warren, Canada’s National Director of United Steelworkers, told Reuters that around 1,000 members had been fired.
Oxford Economics’ Davenport predicts more layoffs in the coming months, with roughly 140,000 lost jobs and unemployment rates rising to the 7% range later this year.
Despite the tariffs, employment in some areas is well maintained, data shows.
Overall, there has been little net employment growth since the beginning of the year, Statscan said. The layoff rate was virtually unchanged at 1.1% in July compared to 12 months ago.
The majority of unemployment in July occurred among workers between the ages of 15 and 24. The group’s unemployment rate was up to 14.6%, the highest since September 2010, excluding the 2020 and 2021 pandemic years.
Policy Rate
Young people’s unemployment rates are typically higher than the national average.
The employment rate for this group, which accounts for around 15% of the total working-age population, fell to 53.6%, the lowest level since November 1998, when the pandemic year was excluded.
Last week, the Bank of Canada kept its key policy rates without changing, some of which were maintained for the strong labor market, but showed that inflation could remain under control and economic growth could lower lending rates.
“We are now a little more confident in our view that the Bank of Canada will resume cutting next month, but printing of an incredibly strong CPI (consumer price index) could prompt another pause next week.”
Money market bets show the probability of a rate cut that rose 11 percentage points from Thursday at 38% at the next monetary policy meeting on September 17.
The information, culture and recreation sector lost 29,000 jobs last month, showing the biggest decline, followed by 22,000 jobs lost in construction and 19,000 business, construction and other support services.
The average hourly wage for gauges closely tracked by the Bank of Canada to check inflation trends increased 3.5% in July to C$37.66 ($27.4) against a 3.2% increase the previous month.
