Is a Bank of Canada rate hike becoming more likely?
The unemployment rate dropped in July to 6.4%, its lowest level since July 2024, further complicating the outlook for the Bank of Canada’s next interest rate decision.
Jobs data beats forecasts
Employment increased by 0.4% in July, and the employment rate rose 0.1 percentage points to 60.9%. Employment rose among core-aged people 25 to 54 years old, mostly for women in that age group. Private-sector employment increased by about 58,000, while the number of self-employed workers rose by about 44,000, partly offset by a decline of about 27,000 in public-sector employment.
Ontario added the most jobs of any province in July, with 52,000, an increase of 0.6%, while British Columbia added 18,000. Nationally, employment gains were concentrated in wholesale and retail trade, finance, insurance, real estate, rental and leasing, professional, scientific and technical services, and construction.
Average hourly wages among employees rose 2.8% year over year in July, down from 3.3% in June.
CIBC senior economist Andrew Grantham said the report exceeded expectations. “It’s stronger growth than we were maybe anticipating a few months ago,” Grantham said in an interview with The Canadian Press.
