Canada: Biggest job loss in eleven months is certainly not good news – NFB

Data released today in Canada showed employment declined by 24K in July, against expectations of a 15K. Matthieu Arseneau, analyst at National Bank of Canada, highlights job creation eased while at the same time wage inflation surged. 

Key Quotes:

“In a context of trade tensions and financial market volatility, the biggest job loss in eleven months is certainly not good news, even more so since it’s due to a plunge in the private sector (worst showing since 2009).”

“Things must still be kept in perspective following outsized employment gains in H1 2019. Despite the July drop, employment in Canada is still up 223K so far this year. No less than 205K of these jobs are full-time positions and 143K are coming from the private sector (best first seven months of the year since 2011).”

“The tight labour market is reflected in wages with hourly earnings of permanent workers rising 0.7% m/m in July (seasonally adjusted by NBF), following similar prints in the two prior months. As a result, wage inflation accelerated to 4.5% on an annual basis in July, the fastest clip since 2008. This development is consistent with the sharp increase in labour turnover currently taking place.”

“While trade disputes remain a concern for global growth, near record low unemployment and accelerating wages provide a buffer for the Canadian economy.”