A slowing economy is driving more Canadians to part-time work and derailing some young Canadians’ efforts to get early work experience, according to the latest jobs data.

Canada’s unemployment rate rose in May despite a gain of 27,000 jobs, Statistics Canada said Friday.

The unemployment rate now stands at 6.2 per cent, up a tick from 6.1 per cent the month previous.

Canada’s population was growing at a pace faster than employers were adding jobs, StatCan said.

Gains in sectors including health care and social assistance, finance and real estate and food and accommodation were offset by losses in construction, transportation and warehousing and utilities last month.

Growth was wholly in part-time positions (up 62,000 jobs), according to the agency, whereas net full-time employment shrank (down 36,000 jobs)

The May job figures come as the Bank of Canada delivered its first interest rate cut of the cycle on Wednesday, with officials saying there’s room for the economy to keep growing even as inflation cools.

More Canadians are also turning to part-time work as a matter of need, not choice, the data shows.

StatCan noted that the proportion of employees doing part-time jobs involuntarily because they can’t find full-time work was up to 18.2 per cent in May, an increase from 15.2 per cent a year earlier.

Brendon Bernard, senior economist at job-search site Indeed, tells Global News that this marks a shift from the labour market’s pandemic recovery, which was led by full-time work.

Another segment of the market showing signs of weakness in May was youth employment, with Statistics Canada noting last month marked the start of the crucial summer job season for this demographic.

The agency noted a decline in the employment rate of returning students aged 20-24 in May, down to 61 per cent from 63.9 per cent a year ago.

Bernard says there’s a connection between a growing number of workers turning to part-time work and a slow start to the summer job season for students.

When employment prospects for established workers weaken, they might turn to seasonal or precarious work to get their hours, Bernard explains. These jobs – often in retail or the food and accommodations sectors – are the typical starting points for youth getting their first work experiences between semesters, he notes.

Students therefore could be boxed out between existing workers trading down to seasonal work and employers slowing their hiring in a cooling economy, he says.

Canada will need to see an economic turnaround to “grease the wheels” for youth trying to get into these entry-level positions, Bernard says.

“We’re right now kind of stuck in neutral. And that’s causing a bit of a traffic jam for people entering the job market.”

Tu Nguyen, economist with RSM Canada, tells Global News that another pressure driving up the youth unemployment rate in particular is competition from immigration. Temporary foreign workers and international students landing in Canada will often default to part-time work before landing a full-time job, she says.

But Nguyen notes that incoming caps from the federal government on international students should help reduce competition for the increasingly scarce job openings in the Canadian market.

“Those jobs will most likely go to workers who are already in the country and that will perhaps keep the youth unemployment rate from rising much higher,” she says.

Leslie Preston, senior economist at TD Bank, said in a note to clients Friday that the Canadian economy “geared down” after a robust jobs report in April.

“The economy has cooled, but it has not fallen off a cliff,” she said.

Bernard says that even with an interest rate cut from the Bank of Canada, he doesn’t expect the economy to pick up steam anytime soon.

Cited from: Global News