Canada Jobs Report Bolsters Case for Interest Rate Pause

Canada's latest jobs report showed stronger-than-expected hiring and a lower unemployment rate, according to UBS Global Research.

The bank said the Labor Force Survey revealed that more people joined the workforce, with the unemployment rate falling to its lowest level since July 2024.

However, slower growth in nominal wages suggests that labor-market heat may be cooling rather than building again.

UBS believes this supports the Bank of Canada's view that the domestic economy is holding up without requiring an immediate interest-rate change.

The bank still expects the central bank to stay 'on hold' and look to the July consumer price index (CPI) report on August 17 for confirmation that inflation is easing, with underlying price pressures contained.