Local Analysts On CAD Jobs Report

• BMO: The soft report is just the latest arrow in the quiver of signs that the economy is losing momentum. Along with the recent friendly CPI result, we believe the case for the BoC moving to the sidelines is now very strong. Looking beyond the next rate decision, we suspect that it may be done raising rates, although still-firm wage and core price growth means that rates are likely to stay high for long.
• Desjardins: These ebbs and flows in the headline employment readings tend to occur around turning points. The simple fact that the economy has seen employment decline in two out of the past three months suggests that the BoC’s efforts to rebalance the labour market are working. Today’s data reinforce our view that the central bank is done raising rates for this cycle.
• RBC: Job growth was largely flat in July, but controlling for a boost to population, labour markets softened more significantly under the surface. Today’s jobs report is a point in favour of keeping the overnight rate at 5%, but the BoC will closely monitor additional indicators – particularly upcoming inflation and consumer spending reports – to determine whether an additional hike is needed.
• TD: The conflicting signals from employment and wages provide an interesting backdrop for the September BoC meeting. The Bank is keenly focused on wages, but the moderation in job growth also fits with their outlook for the economy to slow over 2H23. We think this supports a continued wait-and-see approach from the Bank, and we continue to look for rates to remain on hold into 2024.

Still at the hawkish end of the analyst spectrum:

• CIBC: The reacceleration in wages and still low unemployment rate mean that today's data are unlikely to convince the BoC that the labour market has loosened enough yet to sustainably achieve its 2% CPI target, despite the weaker headline jobs count. We, for now, retain our forecast for one more interest rate hike, although some good news on the inflation front in two weeks time could be enough to prevent that.