Youth job market brightens in summer after prolonged slump
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- Statistics Canada reported youth employment (15-24) rose for the second consecutive month in June, adding 33,000 positions and accounting for the entirety of the 18,000 net jobs gained nationally.
- Youth unemployment fell to 12.7% in June from 14.2% a year earlier, though it remains nearly two percentage points above pre-pandemic levels; last summer's rate peaked near 15%, the highest since 2010 excluding the pandemic.
- Indeed Canada data showed average summer job postings rose 4% year-over-year in May — the first such increase in four years, per chief economist Ali Jaffery of KPMG.
- The Bank of Canada characterized the economy going into summer as a "low hire, low fire" environment, with cautious businesses and lacklustre consumer spending still limiting hiring appetite.
- Canada's population decline and federal caps on temporary foreign workers are reducing competition for entry-level roles, with Jaffery noting that competition from newly arriving immigrants "is lessening."
- For returning students, the unemployment rate among 20-24 year-olds fell to 9.3% from 11.3% year-over-year, while the 17-19 rate dropped to 15.6% from 17.7%, both unadjusted for seasonality.
- KPMG's Jaffery warned new graduates remain vulnerable to skill mismatch as firms experiment with AI tools, particularly concentrated in services sectors where 62% of returning students work.
Why it matters: The recovery is concentrated in consumer-facing sectors — retail, hospitality, and recreation absorbed 62% of returning students in June — making youth employment gains vulnerable if consumer spending softens. With the Bank of Canada still describing a "low hire, low fire" environment and economists flagging AI-driven skill mismatch risks for new graduates, the summer uptick improves odds but doesn't guarantee durable entry-level footing.
