Canada's July Jobs Report Surprises with Broad-Based Gains

Canada's July jobs report has surprised economists, beating forecasts with a rise in employment and a decrease in unemployment. Statistics Canada reported that employment rose by 75,100 in July, while the unemployment rate fell to 6.4%. This is in contrast to predictions made by economists polled by Reuters, who forecasted a net gain of only 16,500 jobs and an unchanged unemployment rate of 6.5%.

The increase in employment was broad-based, with full-time work up 38,600 and part-time up 36,600. The private sector led the gains, including wholesale and retail trade, finance and insurance, and professional and scientific services. However, public-sector employment fell by 14,500 as governments look to rein in spending.

A key detail from the report is that average hourly wages for permanent employees rose 3.0% from a year earlier, down from 3.7% in June. This cooling of wage growth can make it easier for the Bank of Canada to argue that inflation will keep easing, which could lead to lower interest rates and lower borrowing costs.