There was little change to Canada’s job market in July as the unemployment rate inched up ever so slightly to 5.5 per cent, according to data released by Statistics Canada on Friday.
Most notably, compensation for workers spiked up, as average hourly wages grew five per cent after similar gains in May and June.
The Canadian economy lost 6,400 jobs, with the unemployment rate increasing for a third consecutive month as the growing population’s demand for work outpaces job creation. Economists had predicted a gain of 25,000 jobs.
Andrew Grantham, a senior economist with CIBC, wrote in a note that the combination of job loss and wage growth would mean mixed messages for the Bank of Canada as it watches for signs that inflation is coming down.
“Today’s data is unlikely to convince the Bank of Canada that the labour market has loosened enough yet to sustainably achieve its 2 [per cent inflation] target, despite the weaker headline jobs count.”
Desjardins senior economist Royce Mendes wrote that the data released on Friday reinforces the bank’s prediction that the central bank won’t raise rates again this cycle.
“The simple fact that the economy has seen employment decline in two out of the past three months suggests that the Bank of Canada’s efforts to rebalance the labour market are working,” he said.
The jobless rate was led by losses in the construction industry, which shed 45,000 jobs (-2.8 per cent) in July. Meanwhile, employment in the health care and social assistance sector rose by 25,000 jobs (+0.9 per cent).
Employment increased modestly in Alberta, New Brunswick and Prince Edward Island, with declines in Manitoba and Saskatchewan. Other provinces held steady.