The country unexpectedly lost 6,400 jobs in July, while unemployment rates went to 5.5%. Since the COVID-19 epidemic in 2020, July was the first month in which unemployment grew for three consecutive months. May and June witnessed a 0.2% increase, while July saw a 0.1% increase.
Categories that saw a drop in employment:
- Construction: 45,000 jobs
- Public Administration: 17,000 jobs
- Culture and Recreation Employees: 16,000 jobs
- Transport and Warehouse: 14,000 jobs
This could prompt the Bank of Canada to pause its rate hike campaign; nonetheless, salaries rose 5% in July, following 4.2% in June and 5.1% in May.
Categories that saw a rise in employment:
- Health Care and Social Assistance: 25,000 Jobs
- Educational Services: 19,000 Jobs
- Finance, Insurance, Real Estate, Rental, and Leasing: 15,000 Jobs
- Agriculture: 12,000 Jobs
These conflicting signals from July employment will make it difficult for the Bank of Canada to hike interest rates again at its September meeting.
The July employment report reminds us that the Canadian economy is cooling down; yet, pay growth remains high, which may underpin consumer spending in the coming months.
