Farm workers harvest crops near Cypress River, Manitoba. (Photo by: Dave Reede /Design Pics Editorial/Universal Images Group via Getty Images) · Design Pics Editorial via Getty Images
Canada’s labour market lost a net 40,800 jobs in July and the unemployment rate held steady at 6.9 per cent, according to Statistics Canada data released on Friday. The jobs lost were largely full-time positions, the agency says, and net job losses were highest among people aged 15–24.
“Overall, there has been little net employment growth since the beginning of the year, and the number of employed people in July was little changed compared with January (+27,000; +0.1 per cent),” Statistics Canada’s report on the data states.
Financial experts had expected to see 15,000 jobs added, according to consensus estimates published by CIBC Economics, and the unemployment rate to rise 0.1 percentage points to seven per cent.
In a note to investors, CIBC economist Andrew Grantham writes that “the Canadian labour market came back down to earth with a bump” and says today’s weak data “is supportive for our call of a 25-basis-point interest rate reduction” at the Bank of Canada’s next announcement on September 17.
But with that meeting more than a month away, Grantham notes, there remain several more data releases, including inflation data and the August jobs report, that could change the outlook.
BMO chief economist Douglas Porter described the July data as “unambiguously weak,” but argued that the volatility of employment numbers justifies looking at the two-month average. That shows a monthly job gain of 21,000, with the unemployment rate at 6.9 per cent.
For the Bank of Canada, this acts as a heavy counterweight to the outsized strength in June.Douglas Porter, BMO chief economist
For June, Statistics Canada reported that the economy added 83,000 jobs, well above expectations, with the unemployment rate falling from seven per cent to 6.9 per cent.
With labour data for both June and July considered, “the overall picture is a soft economy, running with some excess capacity, not surprising in light of the trade uncertainty,” Porter writes. “For the Bank of Canada, this acts as a heavy counterweight to the outsized strength in June, but it will still need to see inflation slow notably over the next two prints for a September cut to be a high likelihood.”
July’s unemployment rate held steady because the number of people looking for work or on temporary layoff was similar to June, Statistics Canada says — but the participation rate, which measures the proportion of people aged 15 and older with a job or actively seeking one, fell by 0.2 percentage points to 65.2 per cent.
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