RBC Says July Labour Market Data "Consistent With Our Base Case That Assumes the Bulk of Tariff-related Damage Could Already Be Done"

10:11 AM EDT, 08/08/2025 (MT Newswires) -- For RBC, the bottom line is that July saw another month of "volatile" Canadian labour market data, noting the 41k decline in employment reversed, but about half of the outsized gain (+83k) in June, and the unemployment rate held at 6.9%, still below May's 7.0%.

"Somewhat surprisingly," RBC said, "trade exposed sectors did not account for the employment loss in July." It noted manufacturing and trade (wholesale plus retail) were both little changed from the prior month, transportation and warehousing added 26k jobs. Instead, the decline was primarily driven by information, culture and recreation (-29k) and construction (-22k).

Slicing the data some other ways, RBC noted the decline was concentrated among full-time employment (-51k), but also youth aged 15-24 (-34k). StatsCan flagged a "persistently tough summer jobs market that pushed youth unemployment rate to the highest since the global financial crisis (outside of the pandemic)."

"Overall," RBC said. "the Canadian labour market remains softer than usual." But it added the July labour market data is consistent with its base case that assumes the bulk of tariff-related damage could already be done -- noting leading indicators of hiring demand (business sentiment, job openings data) continue to stabilize in the summer after more pronounced cooling in the spring.

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