According to Jinshi Data, Nathan Janzen of the Royal Bank of Canada believes that the latest Canadian labor force data shows no signs that the continued cooling of the labor market has ended. Due to a sharp decline in the labor force participation rate, the number of employed people in July changed little and the unemployment rate remained stable.
The unemployment rate is still nearly a percentage point higher than a year ago, and while wage growth remains high, it will continue to decline. As a result, Janzen expects the Bank of Canada to cut interest rates for the third time in a row next month amid a weak economy and still-high inflation.