Last Friday, Statistics Canada announced that Canada’s economy lost jobs over the month of July, another sign of a slowdown in labour market conditions. Canada’s economy has come under pressure amid trade tensions with the US, which have weighed on consumer and business confidence. The labour market had shown strong improvement in June, but that turned out to be short-lived, reinforcing comments from the Bank of Canada (BoC) that the labour market was soft. Here’s more from Friday’s labour market report.

• Canada’s economy lost 40,800 jobs over July, which was the largest number of job losses in a month since January 2022. Economists expected 10,000 job additions over the month, according to a Bloomberg survey.
• The full-time sector shed 51,000 jobs over the month, while the part-time sector added 10,300 jobs.
• The information, culture and recreation industry lost the most jobs over the month. The construction and health care industries also lost jobs. On the other hand, the transportation and warehousing industry added jobs.
• Canada’s unemployment rate held steady at 6.9% in July, down slightly from May’s almost four-year high of 7.0%. The unemployment rate among youth between 15 and 24 years old increased to 14.6%, the highest level since the pandemic.
• The BoC recently characterized the labour market as “soft.” The BoC’s most recent consumer survey found that Canadians have pulled back on spending due in part to concerns over the labour market.

The underwhelming labour market report might point to another rate cut from the BoC this year. However, that decision will also be guided by the path of inflation and the Canadian economy. Labour market conditions have slowed this year as trade tensions weigh on economic activity. Despite the slowdown, Canada’s overall economy has remained relatively resilient. A trade resolution with the US and ongoing work to improve trade relationships with other countries around the world could be beneficial for Canada’s economic health.

If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.