Canada's labour market cools in June | Canadian Mortgage Professional

Odds of a second consecutive rate cut by the Bank of Canada in July jumped as a result of the latest data, with traders in overnight swaps reportedly pricing the likelihood of a move to lower rates at about 66%, compared with 55% prior to the news.

Employment was virtually unchanged in June 2024 (-1,400; -0.0%), and the unemployment rate increased 0.2 percentage points to 6.4%.

For more info: https://t.co/FMhHrZacnx. pic.twitter.com/AeuPF2w0VL

— Statistics Canada (@StatCan_eng) July 5, 2024

The increase in the national unemployment rate means it now sits at its highest level, excluding the one-off pandemic era, since October 2017 – and Royal Bank of Canada (RBC) assistant chief economist Nathan Janzen said the prospect of a July central bank interest rate cut is certainly in play.

“The [Bank of Canada] will still be watching the next round of inflation data and their own Business Outlook Survey closely ahead of the next interest rate decision later this month,” he said in a note following the Statistics Canada release.

“But with interest rates still at restrictive levels, the bar to at least easing the monetary policy brakes further in the near-term is lower. The June labour market data increases the odds that the central bank will cut rates in July.”

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