{"id":62827,"date":"2025-08-08T17:32:28","date_gmt":"2025-08-08T17:32:28","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2025\/08\/08\/worst-jobs-reading-in-three-years-raises-odds-of-bank-of-canada-rate-cut-next-month\/"},"modified":"2025-08-08T17:32:28","modified_gmt":"2025-08-08T17:32:28","slug":"worst-jobs-reading-in-three-years-raises-odds-of-bank-of-canada-rate-cut-next-month","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2025\/08\/08\/worst-jobs-reading-in-three-years-raises-odds-of-bank-of-canada-rate-cut-next-month\/","title":{"rendered":"&#039;Worst jobs reading in three years&#039; raises odds of Bank of Canada rate cut next month"},"content":{"rendered":"<div style=\"text-align:center\"><\/div><p> \n<br \/><br \/>\n<iframe loading=\"lazy\" title=\"Canada in better shape than most in tariff war\" width=\"1080\" height=\"608\" src=\"https:\/\/www.youtube.com\/embed\/FyH9JSChC_E?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><br \/>\n<\/iframe><\/p>\n<p> Canada\u2019s jobs market turned on its head in July, shedding 41,000 positions after gaining 83,000 in June. <\/p>\n<p> Analysts had called for an additional 10,000 jobs last month. <\/p>\n<p> Here\u2019s what economists think about the <\/p>\n<p>                        jobs numbers<\/p>\n<p>                         and what they could mean for the <\/p>\n<p>                        Bank of Canada<\/p>\n<p>                         and interest rates. <\/p>\n<h2>\u2018Unambiguously weak\u2019: BMO<\/h2>\n<p> \u201cOur overall score for this (jobs) report was just 22.5 (out of 100), the worst reading in three years,\u201d Douglas Porter, chief economist at BMO Economics, said in a note. <\/p>\n<p> Signs of weakness were scattered throughout the data. <\/p>\n<p> For example, while 10 of 16 sectors shed jobs, most of the losses were full-time, private-sector positions. Total hours worked declined, which bodes ill for gross domestic product in July, Porter said. <\/p>\n<p> Wage growth is also down two percentage points from the same time last year, at 3.3 per cent. In June, wage growth came in at 3.1 per cent. <\/p>\n<p> Four provinces recorded job losses, \u201cbut unfortunately it was the largest four,\u201d\u00a0said Porter,\u00a0with British Columbia and Alberta each shedding just over 16,000 positions. That lifted Alberta\u2019s unemployment rate to 7.9 per cent, compared to the national average of 6.9 per cent. <\/p>\n<p> \u201cThis is an unambiguously weak report\u2026 although it comes hard on the heels of an unambiguously strong report. Taken together, the overall picture is a soft economy, running with some excess capacity \u2014 not surprising in light of the trade uncertainty,\u201d he said. <\/p>\n<p> Porter thinks the job market<\/p>\n<p>                        <strong>\u00a0<\/strong><\/p>\n<p>                        will continue to slow, in turn putting downward pressure on inflation, \u201ceventually supporting the case for a return to modest rate cuts.\u201d <\/p>\n<h2>\u2018Made a mockery\u2019: Capital Economics<\/h2>\n<p> \u201cThe Labour Force Survey has once again made a mockery of the economist consensus,\u201d Alexandra Brown, a North America economist at Capital Economics Ltd., said in a note, referring to the jobs flip-flop between June and July. <\/p>\n<p> Brown thinks there were some worrying signs in the report, including that most of the lost jobs were full-time, private sector positions. <\/p>\n<p> While the <\/p>\n<p>                        unemployment rate<\/p>\n<p>                         held steady at 6.9 per cent, that was due to a drop in the number of people working or looking for work. Meanwhile, the labour force shrank by 33,000 even though Canada\u2019s population grew by 37,000. <\/p>\n<p> Brown thinks<\/p>\n<p>                        <strong>\u00a0<\/strong><\/p>\n<p>                        the jobs report opens the door for the Bank of Canada to start cutting interest rates again in September, \u201calthough a surprisingly strong CPI (consumer price index) print next week could prompt another pause,\u201d Brown said. <\/p>\n<h2>\u2018Back down to earth\u2019: CIBC<\/h2>\n<p> \u201cThe Canadian labour market came back down to earth with a bump in July,\u201d Andrew Grantham, an economist at CIBC Capital Markets, said in a note. <\/p>\n<p> Looking at the seesawing from June to July, Grantham estimated that\u00a0Canada gained 17,000 and 5,000 jobs on a three-month and six-month basis, signalling that the economy is still adding jobs, just not fast enough to keep pace with population growth. <\/p>\n<p> \u201cJob quality also appeared weak,\u201d Grantham said, given that most of the losses were full-time and that private-sector employment has made no headway over the past six months. <\/p>\n<p> The employment-to-population ratio also fell in July to 60.7 from 60.9 \u2014 the lowest since 2021. <\/p>\n<p> Grantham thinks that number will get the Bank of Canada\u2019s attention, though he acknowledged that a lot more economic data is coming down the pipeline before the next <\/p>\n<p>                        interest rate decision<\/p>\n<p>                         on Sept. 17 \u2014 including two more <\/p>\n<p>                        inflation reports<\/p>\n<p>                        , a jobs report and quarterly GDP. <\/p>\n<p> \u201cHowever, today\u2019s weaker than expected employment figure is nevertheless supportive for our call of a 25-basis-point interest rate reduction at that September meeting,\u201d he said. <\/p>\n<h2>\u2018Fighting for fewer jobs\u2019: National Bank of Canada<\/h2>\n<p> \u201cRecent jobs data have clearly been noisy but the punchline is: Canada\u2019s labour market is soft,\u201d Taylor Schleich and Ethan Currie, economists at National Bank of Canada, said in a note. <\/p>\n<p> The pair reckon that since Donald Trump assumed office, employment in Canada has grown by approximately 5,000 positions per month and year-to-date. \u201cJob growth hasn\u2019t been this slow since 2016 (excluding 2020),\u201d they said. <\/p>\n<p> Schleich and Currie also worry that the Labour Force Survey is potentially overestimating job growth due to the way it accounts for non-permanent residents. <\/p>\n<p> There are other hurdles, including slowing job vacancies and businesses that appear reluctant to hire. \u201cThat leaves more unemployed Canadians fighting for fewer jobs,\u201d they said. <\/p>\n<ul class=\"related_links\">\n<li>Canada loses 41,000 jobs, but unemployment rate holds steady<\/li>\n<li>&#8216;Cruel summer&#8217; for Canadian youth could linger for years to come<\/li>\n<\/ul>\n<p> That is why the share of workers unemployed for 27 weeks or more rose in July to its highest level since 1988, outside the pandemic years of 2020 and 2021. <\/p>\n<p> \u201cWhile employment is one of the four indicators guiding monetary policy, it\u2019s the next two CPI reports that should have the most impact on the September decision,\u201d Schleich and Currie said. \u201cWe think today\u2019s data warrant higher September rate-cut odds, but if the next CPI report comes out soft, we should see the meeting\u2019s easing probability rise above 50 per cent.\u201d <\/p>\n<p> <em>\u2022 Email: gmvsuhanic@postmedia.com<\/em> <\/p>\n\n<br \/>&#039;Worst jobs reading in three years&#039; raises odds of Bank of Canada rate cut next month<\/a><br \/>\n<br \/>2025-08-08 17:32:28<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Canada\u2019s jobs market turned on its head in July, shedding 41,000 positions after gaining 83,000 in June. Analysts had called for an additional 10,000 jobs last month. Here\u2019s what economists&#8230;<\/p>\n","protected":false},"author":2,"featured_media":62829,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/08\/jobs-baord-0808-ph.jpg","fifu_image_alt":"","footnotes":""},"categories":[31],"tags":[],"class_list":["post-62827","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy"],"_links":{"self":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/62827","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/comments?post=62827"}],"version-history":[{"count":0,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/62827\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media\/62829"}],"wp:attachment":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media?parent=62827"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/categories?post=62827"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/tags?post=62827"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}