Manufacturing sector posted three straight months of job losses
Canada’s job market continued to slow in May – and youth employment is taking a particularly heavy hit as the economy sags under the weight of the US government’s trade war.
Analysts say an increase in the overall unemployment rate to 7.0% reflects a continued softening in hiring activity, especially among youth and in key sectors such as manufacturing.
Brendon Bernard, senior economist at Indeed Canada, said during an interview with the Financial Post that the labour market is “muddling through a very challenging time.”
While April job numbers had been temporarily lifted by election-related hiring, that bump receded in May. Additional pressure came from tariffs and duties that had impacted export-dependent sectors, including autos and metals.
May typically marks the start of the summer job season for students, but this year’s seasonal job market has struggled to rebound.
According to Bernard, employment among 15- to 24-year-olds increased on a raw, unadjusted basis, similar to trends in previous years. However, that bump was not sufficient to offset broader weakness in youth employment.
“The Canadian youth employment situation is in pretty dire straits,” Bernard said. The unemployment rate for that age group stood at 14.2%, and rose to just above 20% among those planning to return to school in the fall.
Summer job postings on Indeed were down 22% in early May compared to the same period last year. Bernard said the decline is in line with broader trends showing reduced employer demand across the economy.
Another sign of strain in the labour market is the rising duration of unemployment. “This past May, the average duration of unemployment was just under 22 weeks, and that’s compared to 18.4 weeks, just a year earlier,” Bernard said. He added that fewer people are changing jobs and that new entrants to the labour force, especially youth, are facing longer job searches.
While layoffs have not significantly increased, Bernard said slow hiring remains the main reason for the continued deterioration in labour conditions, with Canada’s growing population adding further pressure on job availability.
