Canada’s jobless rate held steady at 6.4% in July, but overall employment dipped, signaling that the economy is slowing down.

What Happened?

• The economy shed a net 2,800 jobs last month, with losses in part-time work offsetting gains in full-time positions.
• The national unemployment rate is nearly 1% higher than it was a year ago, and it’s now at its highest level in 30 months.
• Labour market participation also dropped to 65.0%, with the labour force shrinking by 11,000 despite a population increase of 125,000.

• Average hourly earnings growth cooled to 5.2% year-over-year, down from 5.4% in June.
• This slowdown in wage growth is crucial, as it impacts overall inflation—a key focus for the Bank of Canada.

What’s Next? RBC’s assistant chief economist Nathan Janzen expects further cooling in the labour market, with unemployment likely to rise. All signs point to the Bank of Canada cutting rates again in September.

What do you think about the state of Canada’s economy?