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Employment for youth aged 15 to 24 rose for the second consecutive month, adding 33,000 positions in June, Statistics Canada reported.Fred Lum/The Globe and Mail
Young Canadians seeking work are enjoying one of the best summer job seasons in years after a prolonged period of weakness.
Employment for youth aged 15 to 24 rose for the second consecutive month, adding 33,000 positions in June and accounting for the entirety of the net 18,000 total jobs gained last month, Statistics Canada reported Friday.
Unemployment in the age group edged down to 12.7 per cent, compared with 14.2 per cent last June.
“The good news is this job print – also last month’s employment report – have all shown improving conditions for youth compared with a year ago when finding a job was at its peak difficulty,” said Laura Ximeng Gu, senior economist at Desjardins.
Last summer, the youth unemployment rate peaked at closer to 15 per cent, the highest level since 2010, not including the early pandemic years. A sluggish economy led to weak hiring rates, which was exacerbated by the U.S.-driven trade war, which has dampened companies’ hiring and investment plans.
“Historically, new entrants and the more inexperienced workers tend to take the brunt of the weak labour market conditions whenever the economy is weak,” Ms. Gu said.
Ali Jaffery, chief economist at KPMG, said that cautious businesses and lacklustre consumer spending meant that sectors that typically absorb youth workers weren’t looking to expand.
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But since last summer, uncertainty has improved somewhat. U.S. tariffs are in a holding pattern; interest rates are lower; and consumer spending has shown resilience, offering businesses some relief and leading to stronger labour demand, according to Mr. Jaffery.
A recovery has taken root in sectors more reliant on consumer spending, such as retail, hospitality and recreation, Mr. Jaffery noted. In June, 62 per cent of students returning to an education program in the fall worked in those sectors.
While the youth unemployment rate declined in June, it remains almost two percentage points higher than prepandemic levels.
The Bank of Canada characterized the economy going into the summer as a “low hire, low fire” environment.
However, for the first time in four years, the average number of summer job postings was up 4 per cent year-over-year in May, according to Indeed Canada data, suggesting that labour demand was on firmer footing.
In addition, Canada’s population is now in decline, with the federal government lowering caps on the number of temporary foreign workers in the country, after years of sharp growth. This is potentially offering more opportunities for youth who compete for similar entry-level roles.
“I think those individuals had to compete with newly arriving immigrants who were upgrading their skills and had less opportunity in areas where they had studied,” Mr. Jaffery said. “That competition is lessening.”
For youth unemployment to come down to prepandemic levels, economic growth will need to pick up so that businesses have the confidence to hire again, Ms. Gu said. The same goes for the overall unemployment rate, which hit 6.5 per cent in June, down a tick from 6.6 per cent in May.
For students returning to school, the youngest continue to face more difficulty, but things have still improved. The unemployment rate for those aged 17 to 19 fell to 15.6 per cent from 17.7 per cent last June, on a seasonally unadjusted basis.
The jobless rate for returning students aged 20 to 24 fell to 9.3 per cent from 11.3 per cent over the same period, unadjusted for seasonality.
The outlook for new graduates will not only depend on economic conditions, but also the trajectory of technological change, Mr. Jaffery said.
“They could be quite vulnerable to skill mismatch, given that they’re entering the job market at a time when firms are experimenting and playing with AI, and they haven’t settled on what tools they want and what skills they need.” he said.
He also pointed out that this could be even more worrying if youth continue to prefer working in the services sector rather than goods – such as manufacturing and construction – which has seen a decline in career interest.
“They’re competing more with technology [in the services sector], and we may struggle even more in the areas that are already points of stress for productivity in our economy if those preferences don’t change,” Mr. Jaffery said.