Jobs Report Headlines Today’s Docket – 0830ET

Today’s labour force survey offers the sole main jobs update between the BoC cutting for a second time on Jul 24 and the next meeting on Sep 4, for which another 25bp cut is currently priced.

• Bloomberg consensus sees employment growth of 25k after a disappointing -1k in Jun, the unemployment rate increasing 0.1pp to 6.5% and a cooling in average hourly wage growth to 4.8% Y/Y after a latest acceleration to 5.6%.
• With Bank commentary and Macklem both stressing widening excess supply and signs of slack in the labour market, we expect the unemployment rate to receive most focus.
• The heavily expected 6.5% for July (11 of 14 analysts) would mark the sixth consecutive monthly increase after what’s already been a 1pp increase over the past year for about double the pace of the increase in the US.
• One area that could get greater attention than normal is youth unemployment. It has increased particularly strongly this year (+2.15pps since Dec to 13.5% for 15-24 vs +0.5pp to 5.3% for prime-age). Some might argue this implies less of a drag on economic growth than if increases had been led by prime-age, although Macklem saw it as a sign of building slack in the market along with new non-permanent residents taking longer to find their first job.
• Wage growth is another area of intrigue, with average hourly earnings Y/Y growth regularly surprising higher in recent months but the BoC continuing to talk of signs of moderation (its wage-common measure was much lower in Q1 at 3.0% Y/Y). Consensus sees permanent employee hourly wage growth cooling from a particularly strong 5.6% to 4.8% Y/Y.