09:00 AM EDT, 09/10/2024 (MT Newswires) -- There's not much mystery around Canada's labor market -- the economy is grinding out modest job growth, but it can't come close to the still-torrid labor force/population growth, said Bank of Montreal (BMO).

As a consequence, the unemployment rate continues to be higher, especially for young people, noted the bank.

The flip side of the rise in the jobless rate is the now steepening drop in the employment rate, stated BMO. The share of the adult population -- 15 years and over -- who now have a job has slid to just 60.8%.

Aside from the COVID-19 pandemic, that's the lowest share since 1999 and isn't that different from as far back as 1981. The all-time high was hit in February 2008 at 63.6%, according to the bank.

Two demographic factors are driving the rate lower: 1) the peak of the baby boom is hitting retirement age with full force, aging out a lot of workers, and 2) the part rate for those 15-24 has fallen sharply as well, as many of the new entrants are students and/or have given up looking for work.

However, also note the red line -- the employment rate for even those of prime working age (25-54) has dropped 1.5 ppts from a record high early last year. This reflects a "softer" underlying job market, added BMO.