Canada’s unemployment rate held steady in July at 6.9 per cent, but the economy lost 41,000 jobs , the biggest monthly drop since January 2022, Statistics Canada reported Friday.

Industries such as construction and information, culture and recreation led the way in employment losses, with health care and social assistance, building and support services, agriculture and public administration also posting declines.

These declines partially offset the 83,000 jobs gained in June , which led to the unemployment rate ticking down from its seven per-cent high in May.

Statistics Canada said  there has been little net employment growth since January. “July threw some cold water on the Canadian job market, after getting off to a hot summer in June,” said Brandon Bernard, chief economist at Indeed Canada, in a note. “Employment fell at its fastest pace since the end of the pandemic, reversing about half the increase from the month prior.”

Transportation and warehousing, a more trade-sensitive industry, reported its first monthly employment gain since January. Manufacturing also reported gains last month, but was down 39,000 jobs since January. Despite trade uncertainty, the layoff rate was unchanged at 1.1 per cent in July, compared to 1.2 per cent reported the year before.

“Somewhat surprisingly, trade exposed sectors did not account for the employment loss in July,” said

Royal Bank of Canada economist Claire Fan, in a note. “Manufacturing and trade (wholesale plus retail) were both little changed from the prior month, transportation and warehousing added 26,000 jobs.”

Bernard said many of the details in the weak numbers in July point to trends that have weighed on the labour market for years, as opposed to a trade shock.

Last month, the Bank of Canada held its interest rate for the third consecutive time, citing trade uncertainty, evidence of underlying inflation and an economy that seemed to show more resilience than what was initially expected. Canada’s economy is on track for flat growth in the second quarter, as opposed to the contraction the central bank and other economists had forecast.

Oxford Economics senior economist Michael Davenport said this jobs report will do little to sway the central bank to cut at its next rate decision in September.

“Despite a weakening labour market, the Bank of Canada will likely continue to hold the policy rate at 2.75 per cent given still elevated trade policy uncertainty, duelling forces on inflation and growth from the trade war, and major fiscal stimulus in the pipeline,” he said, in a note.

Total hours worked were little changed from June, falling by 0.2 per cent during the month, and average hourly wages increased by 3.3 per cent on a year-over-year basis.

Young people continue to face one of the toughest job markets in years, with the youth unemployment rate climbing to 14.6 per cent in July, its highest since 2010. The jobless rate among returning students remains at historic highs at 17.5 per cent, the highest for the month of July since 2009.

Overall, of the 1.6 million of people currently unemployed, 23.8 per cent have been searching for a job for 27 weeks or more.

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On the provincial level, Alberta’s unemployment rate jumped a full percentage point to 7.8 per cent last month and the jobless rate in British Columbia climbed to 5.9 per cent. Employment in Saskatchewan increased and was little changed in other provinces.