RBC Previews This Week's Labor Market Report in Canada

09:05 AM EDT, 09/02/2025 (MT Newswires) -- Canada will release the Labour Force Survey for August on Friday, at 8:30 a.m. ET, noted RBC.

Canadian job markets have shown some signs of stabilizing in recent months, with the unemployment rate ticking down to 6.9% in June and July from a 7.0% rate in May, said the bank.

RBC doesn't expect Canadian labor market weakness to have fully run its course, and looks for Canada's unemployment rate to edge back up to 7% in August alongside minimal employment growth (up 5,000.) Lingering trade uncertainty still appears to be stalling hiring demand -- early data on job postings from indeed.com has been edging lower into late summer -- but conditions also haven't softened enough to drive widespread layoffs.

Critically, the bulk (90%) of Canadian exports to the United States through June have remained tariff-free under an exemption for CUSMA-compliant trade. Because of it, RBC looks for Thursday's international trade data to show Canada maintained the lowest average effective tariff rate of major U.S. trade partners despite tariff revenues that continued to rise in July

Tariffs on the remaining 10% of Canadian exports to the U.S., concentrated in metal products, are still having a significant impact -- manufacturing employment in Canada ticked higher in July but was still down nearly 40,000 from where it was at the beginning of this year.

But the bleed in the Canadian jobs market for now appears contained to the more trade-exposed sectors and hasn't been spreading -- employment in service-producing sectors was still up 146,000 from the end of last year in July, led by a 71,000 increase in wholesale and retail jobs, added RBC.

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