New numbers from Statistics Canada show Alberta's unemployment rate has now hit its highest level since 1994 and economists say it will likely get worse before it gets better.

The provincial unemployment rate moved up 0.7 percent to 8.6 percent because of job losses throughout the month of July.

“It says that we are in the belly of the recession right now and my guess is it’s going to get a little bit worse, I think, before it gets better,” said Todd Hirsch, Chief Economist at ATB Financial. “My best guess, at this point, is that we’re going to see oil prices continue within this $40 to $50 range and that’s going to put strains still on the labour market.  I think a lot of energy sector companies are still trying to get their costs down and that might mean more layoffs. Peripheral industries, like construction and manufacturing and business services, I think are also going to continue to see some strain.”

The average unemployment rates in Alberta’s major cities have also jumped; Calgary is at 8.6 percent from 8.3 percent in July and Edmonton is 7.7 percent from 7.0 percent.

“There were a few surprises in the job report. The big surprise actually was, we didn’t actually lose that many jobs, only about 1,400 jobs provincially, which is negligible really, but the big news was that huge jump in the unemployment rate and that was caused by more people entering the job market, entering the labour force, so there’s more people in Alberta looking for work, even though we didn’t actually lose that many jobs in July,” said Hirsch.

Economists say the increase is partly due to the displacement of Fort McMurray residents.

“I think we saw a lot of displaced Fort McMurray residents looking for work in Edmonton, other parts of the province, and that pushed that unemployment rate higher,” said Hirsch.

Over the past year, Alberta has lost over 104,000 jobs.

“That is another one of the results of the job report this morning is that it shows deterioration in the quality of jobs so Alberta in July, we lost about 10,000 full-time jobs, we gained about 9,000 part-time jobs so the difference is about 1,000, about 1,400, but it’s clear a deterioration in the quality of jobs. A lot of people in Alberta they need to be working full-time or they certainly want to be working full-time, part-time work is all they’re able to find so they’re counted as employed but they’re not fully employed.”

Hirsch says there are still jobs in the service and food and accommodation sectors but a lot of them will be low paying and part-time.

The numbers come from Statistics Canada’s latest labour force survey, which showed Canada lost 71,400 full-time jobs, a figure that was partially offset by the addition of 40,200 less desirable part-time positions.

The changes helped push the national unemployment rate in July up to 6.9 percent, from 6.8 percent the previous month.

Alberta wasn’t the hardest hit, according to data in the report. Ontario suffered the biggest job losses of any province in July, as its labour market decreased by 36,100 net positions. The data said 18,900 of those jobs were full time.

(With files from The Canadian Press)