Canada's Payroll Growth Slows, But Hiring Remains Strong

Canada's labor market continues to show signs of improvement, but wage growth has slowed. According to Rosenberg Research, the country added payroll jobs for a fifth consecutive month in July, with a gain of 26,100 positions.

This upward revision also boosted June's job increase, indicating that hiring is improving without becoming overly aggressive. However, the overall pace remains modest, with payroll employment rising by just 0.9% from a year earlier.

The bigger story for inflation watchers was wages: average weekly earnings growth eased to 3.2% year over year in July from 3.4% in June. This slowdown in wage growth may signal less pressure on the Bank of Canada to maintain restrictive monetary policy, potentially leading to lower short-term government bond yields and influencing borrowing costs.