Canada sheds tens of thousands of jobs as tariffs dent hiring plans
The economy shed 40,800 jobs in July, compared with a net addition of 83,000 jobs in June, taking the employment rate, or the percentage of people employed out of the total working-age population, to 60.7%, Statistics Canada said.
The unemployment rate, however, remained steady at a multi-year high of 6.9%.
Analysts polled by Reuters had forecast the economy would add 13,500 jobs and the unemployment rate would tick up to 7%.
'Canada's labor market snapped back to reality in July,' Michael Davenport, senior economist at Oxford Economics, wrote in a note.
US President Donald Trump's sectoral tariffs on steel, aluminum and autos have hit the manufacturing sector hard and reduced the hiring intentions of companies, the Bank of Canada has previously said.
The number of people employed in manufacturing shrank by close to 10,000 in July on a yearly basis as sectors linked to steel, aluminum and autos curtailed hiring and experienced layoffs.
Marty Warren, the United Steelworkers' national director for Canada, told Reuters that about 1,000 members have been laid off.
Oxford Economics' Davenport predicts more layoffs in the coming months, forecasting about 140,000 lost jobs and an unemployment rate rising to the mid-7% range later this year.
Employment in some areas has held up well despite tariffs, the data showed. 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 with 12 months earlier.
The bulk of the job losses in July occurred among workers aged between 15 and 24 - that group's unemployment rate edged up to 14.6%, the highest since September 2010 excluding the pandemic years of 2020 and 2021.
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