Notes From the Desk – Canadian July Employment Data – Meh!
Today’s employment data will do little to calm fears over the state of the labour market.
The Numbers:
- Instead of creating an expected 20k jobs, the economy lost 2.8k positions.
- The mix was mixed:
- 61.6k full-time jobs created.
- 64.4k part-time jobs lost.
- But 42k private sector jobs lost versus 41k public sector jobs created.
- The unemployment rate held steady at 6.4% (6.5% expected), but this was due to a drop in the participation rate.
- YoY wage growth was 5.2% (4.8% expected).
The Implications:
The minutes of the Bank of Canada’s last meeting showed they are concerned about the state of the labour market. Today’s data will do little to assuage those fears. We think the Bank remains poised to deliver 25 bps cuts at their next three meetings this year.
Yields are 5-6 bps lower, but most of the moves occurred before the numbers were released, as they tracked similar moves in US rates.
