The central bank has said future rate decisions will be based on economic data.
OTTAWA — The Canadian labour market is showing some signs of softening as the unemployment rate rises and wage growth slows, but with another solid job gain in June, forecasters are still expecting an interest rate hike by the Bank of Canada next week.
"The reason the unemployment rate can rise alongside historically strong employment growth is that population growth continues to set new records — including an 84k monthly increase in June," wrote RBC assistant chief economist Nathan Janzen in a note to clients. "Overall, the job growth that we saw this month puts this report on the positive side, just not anything that we should get excited about," said Brendon Bernard, a senior economist at hiring website Indeed.
"The June labour market data was mixed but shouldn't be enough to prevent the Bank of Canada from following through with a second straight 25 basis point interest rate hike at the next policy decision next week," Janzen wrote. However, Statistics Canada said wage growth also softened last month, rising 4.2 per cent from a year ago. That's compared with a year-over-year gain of 5.1 per cent in May.
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