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Instant View: Canada loses 30,600 jobs in July, jobless rate remains at record low 4.9%

Economy Aug 05, 2022 09:11AM ET
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© Reuters. FILE PHOTO: People wait as an employee restocks a shelf as people shop at a Walmart Supercentre in Toronto, Ontario, Canada March 13, 2020. REUTERS/Carlos Osorio/File Photo

TORONTO (Reuters) - Canada's economy lost a net 30,600 jobs in July, in both full-time and part-time work, Statistics Canada said on Friday. The jobless rate remained at a record low 4.9%.

Analysts surveyed by Reuters had expected an increase of 20,000 jobs in July, and for the unemployment rate to increase to 5.0%.

Market reaction: CAD/

STORY:

Link:https://www150.statcan.gc.ca/n1/daily-quotidien/220805/dq220805a-eng.htm

COMMENTARY

DOUG PORTER, CHIEF ECONOMIST AT BMO CAPITAL MARKETS

"On the whole, it's a modest disappointment. I think the overall impression is that job growth was cooling but this is clearly weaker than expected."

"I think there's some issue whether this slowdown is more driven by demand or by supply. In other words, we did see another drop in the participation rate in the labour force in the month and I find it notable that most of the weakness was in healthcare and education."

"But, overall, the main takeaway here is that the job market is still very tight. We're still dealing with the lowest unemployment rate in at least 50 years, and wages that are running strong. But from a growth angle the reality is employers are having trouble finding employees, and, so that caps the growth of the economy."

"We were assuming that the Bank of Canada would be slowing its pace of rate hikes in incoming meetings and this report fits with that view. I don't believe things are nearly weak enough to call a halt to rate hikes. We had penciled in a 50 basis point rate hike in September and I would say we're comfortable with that call based on today's numbers."

ANDREW GRANTHAM, SENIOR ECONOMIST, CIBC CAPITAL MARKETS

"The Canadian employment figures were somewhat of a head-scratcher again in July, with employment falling for a second consecutive month but the unemployment rate remaining historically low."

"Job losses were strangely concentrated in the services sector, including wholesale & retail, education and health. With some of those sectors reporting high vacancy rates; labour supply rather than demand appears to be the main issue. That said, the major difference between today's report and last month's is that wage growth unexpectedly decelerated."

"While today's figures muddy the waters further for policymakers, the Bank of Canada will likely focus on the historic low unemployment rate and still strong wage growth to justify another non-standard rate hike at its next meeting."

DEREK HOLT, VICE PRESIDENT OF CAPITAL MARKETS ECONOMICS, SCOTIABANK

"It's disappointing all round. Unlike the last time, that was driven by self-employed, this time I think there is much greater underlying weakness."

"I don't think it's going to knock the Bank of Canada off course or hold them back at all. I think they know full well that fighting inflation is going to break a few things and one of them will be slowing job market momentum as a part of that. That's a needed outcome."

Instant View: Canada loses 30,600 jobs in July, jobless rate remains at record low 4.9%
 

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