Canada Employment Research Brief

Labour market little changed in July. Canada’s economy lost a marginal 2,800 jobs in July, which was well below the consensus estimate of a 22,500-position gain and marked the second consecutive monthly contraction. This comes as businesses have curbed hiring intentions in the wake of slower economic growth. At the same time, the labour force participation rate fell to 65 per cent. This drop was mainly concentrated in younger job seekers, who may have stopped looking for work after being disproportionately impacted by the slowdown in hiring. The unemployment rate was unchanged at 6.4 per cent as a result. Combined, these factors lend support to a further 25-basis-point interest rate cut in September. Nevertheless, some risks remain that could slow the pace of rate reductions. Full-time, prime-age employment rose by 60,000 jobs, hours worked jumped 1.0 per cent monthly and annual wage growth — while down from 5.4 per cent in June — held at an elevated rate of 5.2 per cent.