Statistics Canada reported that employment fell by 68,000 in September and the unemployment rate rose to 6.5 per cent. Youth aged 15 to 24 accounted for 48,000 of those lost jobs. After a year and a half of Mark Carney's Liberals in office, September's jobs report offers a fair review of the Liberal government’s economic stewardship. That record so far is poor.
The layoff rate, the share of employees who lose their jobs in a month, was 0.7 per cent in September, close to its average from 2017 to 2019. The job-finding rate, the share of unemployed people who find work in a month, was 30.6 per cent, down from 32.8 per cent a year earlier and well below the pre-pandemic average of 36.5 per cent. What this means is that while Employers are attempting to retain the staff they have, they are declining to add more. This hiring freeze also indicates that employers have a pessimistic or uncertain forward business view as they look to close out the year.
Youth employment has now fallen for two months running, by 67,000 in total, which erases what young people gained from April to July. The youth unemployment rate stayed at 13.0 per cent only because 50,000 young people left the labour force altogether. These are the so-called NEETs (Not in Employment, Education, or Training), and there are now 914,000 of them in Canada, the highest level since 2018 (excluding the pandemic).
The same pattern shows up in the participation rate, the share of people aged 15 and older who are working or looking for work. It fell to 64.8 per cent, the lowest since December 1997 if the pandemic years are set aside. Statistics Canada attributes much of the decline to an aging population, and people 65 and over now make up 23.2 per cent of the working-age population, up from 20.5 per cent a year earlier. Aging is real, but it moves slowly, and it does not explain why young people, who are not retiring, left the labour force by the tens of thousands in a single month.
One of the reasons could be employee pay. Average hourly wages rose 2.3 per cent over the year to September, while consumer prices rose 3.0 per cent in the year to August, Statistics Canada reported. Workers, especially low-wage workers (of whom young people make up the majority), are sensitive even to these relatively small gaps in purchasing power. They see how more of their wages are consumed by food, shelter, and other necessities and less of their pay is available for savings.
Zooming out, some could say that the labour market is in better shape than two weak months suggest. Employment is still up 95,000 from a year ago, private-sector employees are up 163,000, and unemployment is below its April peak of 6.9 per cent. On this reading, August and September are a soft patch after a strong spring, when employment rose by 181,000 from April to July.
While those numbers are accurate, a year-over-year gain of 95,000 jobs among more than 21 million workers is growth of about half a per cent, and it coexists with a job-finding rate far below its normal level. Private-sector employment was little changed for a second month, which is resilience in the sense that it did not shrink, but when private employers add almost no one for two months, it spells an uneasy future for new entrants. The gains in the spring were real, but they belonged in large part to the young, who have now given them back.
This view does not ignore the wider macroeconomic context. As part of the government's balanced budget action, it has shed 70,000 employees in September and 119,000 over the year. Statistics Canada says most of the yearly decline is in educational services, which provinces and school boards run. The ongoing tariff conflict with the United States has another impact. Manufacturing lost 13,000 jobs after gaining 22,000 in August.
What the federal government does own is the climate for private hiring. What we've seen is a year of almost complete hiring stagnation and reduction in real-wage earnings. For a government that says we are building at a rate not seen in a generation, where are the jobs to prove it? While we search for those jobs, we have nearly 1 million young people who are locked out of work. Where the Liberals promised generational hope, they seem to be delivering a generation with no opportunities.
