As the global economy continues to recover, Canada's has taken a nosedive, shedding 39,400 jobs last month causing the unemployment rate to increase to 7.2% from 7.1% in June and May.
July is the second consecutive month of job losses, however 39,400 is no comparison to only 400 last month.
The losses came from an unexpected place, the public sector. Statistics Canada reports 74,000 public service jobs, half of those in healthcare and social assistance, were shed and weren't met with sufficient private sector growth.
While the Harper government has been cutting to deal with their ballooning deficits, economists are doubtful government measures are responsible for such a sharp drop in the public sector.
"I've no doubt there is some restraint going on, but it's incredibly hard to believe that it all happened effectively in one month," said Doug Porter, chief economist with the Bank of Montreal.
CIBC's chief economist Avery Shenfeld said 47,000 losses in stable areas like healthcare and social assistance "could simply be statistical noise" or a correction from previous counts.
Despite the alarming drop, the number of hours worked increased, along with 31,400 new private sector jobs and 13,500 in the manufacturing sector. Businesses and the service sector added 29,000 jobs as well.
Unemployment Rates across Canada
Region July Trend June Canada 7.2% 7.1% Nunavut 13.7% 13.5% Prince Edward Island 11.8% 10.9% Newfoundland 11.4% 10.9% New Brunswick 10.2% 11.2% Nova Scotia 9.0% NC 9.0% Quebec 8.2% 7.9%
Region July Trend June Ontario 7.6% 7.5% Northwest Territories 7.3% 8.9% British Columbia 6.7% 6.3% Manitoba 5.5% 5.0% Yukon 5.3% 6.4% Alberta 5.0% 4.5% Saskatchewan 4.0% 3.7%Source: Statistics Canada