Youth unemployment at recession – level, CIBC Report finds – Moneysenense

CIBC analyst Andrew Grantham says that the rise in unemployment under the age of 15 to 24 has continued than what the current economic background would suggest.

He says that the youth -unemployed speed usually increases around four percentage points during periods of weakness, which is higher than the profit of two percentage points among employees of the prime age when the economy withdraws.

But since 2022, the youth unemployment rate has risen more than average, with a profit of 5.5 percentage points. At the same time, this is core-aged employees have seen a lower than usual increase in unemployment.

Companies that implement more technical tools, including AI

Grantham suspects that the rise of artificial intelligence is a factor on the demand side, because the jobs that young people usually run the most risk of technological changes by young people.

He says that the unemployed trend is also partially due to an increase in non-permanent residents of 2022-24 who contribute to the labor force, but he notes that the higher range of employees does not take weakness on the entire market.

“With the population growth that recently slowly slows down, largely due to a limitation of the number of students, it is unlikely that the supply factor is the renewed weakening in the employment in the youth this year,” wrote Grantham published in his analysis on Tuesday.

Statistics Canada reported that youth unemployment rose to 14.6%in July, the highest rate since September 2010.

Grantham said that early data indicate the role of AI and other Labor-Substituting technologies that will probably affect younger Canadians disproportionately looking for jobs. For example, the report suggested that the retail sector is partly responsible for high unemployment, because retailers are increasingly rolling out self -controls, while companies and support services are increasingly turning to AI. But the factors that contribute to the weakening labor market will not last forever, said Grantham.

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“Population growth, especially among (non-permanent inhabitants), already slows down, which means that less incremental delivery must be included in the labor market,” he said.

Other periods of technical progress that have led to unrest on the labor market, including the rise of the personal computer and internet, had compensated those losses in the long term with new jobs in other areas, he said.

The report did not indicate how quickly the trend could shift.

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