The Canadian economy saw the biggest monthly drop in full-time work in nearly five years, Statistics Canada said Friday in a jobs report that highlighted a number of troubling trends painting a negative portrait of the jobs market.

The July Labour Force Survey found the Canadian economy shed a worse-than-expected 31,200 jobs from June to July. The unemployment rate ticked up 0.1 percentage point to 6.9 per cent. It was the fourth straight month of contraction in the jobs market.

There were few bright spots in the report that saw a decline in the number of jobs for youth, full-time workers and public sector employees. The picture also darkened for Ontario – which saw its first monthly jobs decline in nearly a year – and Alberta – where the unemployment rate rose to 8.6 per cent, the province’s highest since 1994, and it’s the first time Alberta has a worse jobless rate than Nova Scotia, which was at 8.4 per cent.

Some of the job losses, however, were partially offset by gains in employment among workers 55 and older and among part-time workers, as well as an increase in private sector jobs and in provinces such as New Brunswick and British Columbia.

Here’s a look at some of the dichotomies at play in Canada’s labour market:

Canada vs. U.S. jobs markets

Canada’s negative jobs report stands in sharp contrast to the sunnier picture south of the border, where the economy added a better than expected 255,000 jobs and the unemployment rate sits at 4.9 per cent, a full two percentage points below Canada’s.

The U.S. gains were broad-based and included significant increases in manufacturing, health-care and retail. The country also saw wages climb more than anticipated, good news that could increase consumer spending in that country.

Labour market strength stateside could also prove to be positive for Canada’s economy in the second half of the year.

“Mitigating the sombre start to the quarter was a healthy employment gain south of the border,” said TD economist Leslie Preston.

“With exports expected to help lift Canada’s growth in the coming quarters it is good news that the U.S. is proving resilient to global headwinds.”

Youth vs. older workers

Young workers fared worst in July, typically a month when students rely on working summer jobs.

The report pointed to a reduction of 28,000 jobs for those aged 15 to 24 last month — all of which were part-time jobs. The youth unemployment rate stands at 13.3 per cent, nearly twice the national average. On an annual basis, there were 66,000 fewer jobs for that demographic than there were last July, a decrease of 2.7 per cent.

Employment among older students aged 20 to 24 and younger students aged 15 and 16 was unchanged from a year ago, but declined among students aged 17 to 19.

Meanwhile, workers aged 55 and up saw employment gains, largely due to a swell in that population as the Baby Boomers cohort ages. Employment among that demographic has risen by 105,000 jobs or by 6.6 per cent over the past year.

Full-time vs. part-time jobs

The decline in full-time jobs has been a troubling and ongoing trend, suggesting the country faces a widespread problem of underemployment.

About 71,000 full-time jobs were lost in July, which was only partially offset by a 40,000 uptick in part-time labour.

The trend toward more part-time jobs points to more volatile work without benefits or guaranteed hours and lower incomes.

“Employment gains tilted to full-time means higher income and this should translate into stronger consumption,” said National Bank economist Matthieu Arseneau.

“Moreover, the economy will also benefit from full-time jobs as it supports household formation and the housing market. A drop is consequently bad news.”

The economy has added 71,000 jobs since last July, an increase of 0.4 per cent — but that growth has been entirely due to part-time hiring.

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Ontario vs B.C.

Ontario’s nearly 40,000 job losses last month was the first decline since September 2015. Still, the province’s unemployment rate was unchanged at 6.4 per cent as fewer people were looking for work.

Ontario Economic Development Minister Brad Duguid said the trend for the province remains good despite the sharp dip in July.

“These job numbers fluctuate from month-to-month,” he told a news conference at Queen’s Park.

“While I’d rather have seen an increase the overall trends in Ontario continue to be very, very positive.”

Duguid said there was an increase of 13,000 manufacturing jobs and that the latest gross domestic product figures show Ontario has the fastest-growing economy in Canada.

Across the country, B.C. added 12,000 in July, continuing a hot streak of increasing jobs that has lasted since spring 2015. The province’s unemployment rate, at 5.6 per cent, is the lowest rate in the country.

British Columbia has also logged the fastest rate of growth in jobs among all provinces over the past year. The province’s healthy job market could help to explain its booming housing market.

Public sector vs. private sector jobs

Public sector jobs fell by 42,000 in July, but there was little change among those working in the private sector and self-employed workers. Year-over-year, the public sector has lost some 40,000 jobs while the private sector has added 103,000 and self-employment was little changed.

Economists at CIBC, however, are skeptical about the true impact of that drop in public sector jobs.

“Although some provinces are undergoing belt tightening, we find it unlikely that the public sector has indeed shed 1.1 per cent of its workforce over the past year, and 1.2 per cent in any single month,” they wrote in a report.

“Federal fiscal stimulus, and the regular see-saw in the LFS’s data, would suggest that this particular category is headed for a rebound ahead.”

Includes files from The Canadian Press

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