The Canadian economy lost a net 30,600 jobs in July, in both full-time and part-time work, Statistics Canada said Friday. The unemployment rate remains at a record low of 4.9%.
Analysts polled by Reuters had instead expected an increase of 20,000 jobs in July, and the unemployment rate to rise to 5.0%. Doug Porter, BMO's chief capital markets economist opined that, “overall, it was a moderate disappointment. I think the overall impression is that job growth is slowing but this is clearly weaker than expected.”
"I think there are some issues as to whether this slowdown is more driven by demand or supply. In other words, we saw another decline in the participation rate in the labor force in July and it was noticeable that most of the weakness was in health care and education.”
In general, analysts are of the view that the labor market is still growing and the unemployment rate is at its lowest level in nearly 50 years. Not only that, salary growth is also strong. Based on observations, employers also face problems in finding employees.
With this, analysts assume that the Bank of Canada will slow down the pace of rate hikes in the upcoming meeting.
On the other hand, CIBC economist Andrew Grantham opined that today's numbers are seen as increasingly confusing to policymakers, the Bank of Canada will likely focus on the historically low unemployment rate and still strong wage growth to justify another rate hike at its next meeting.
The US dollar currency traded stronger against the Canadian currency with a strengthening of 0.67% to trade at 1.2951.
