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Residential Market Commentary - Waiting for More Data
August 12, 2025 | Posted by: Matthew J. Charlton
The Bank of Canada’s next interest rate announcement is set for September 17. Between now and then there will be plenty of economic data to digest.
The latest significant report was Statistics Canada’s July employment reading, which surprised most analysts with a drop of nearly 41,000 jobs. Most of those positions were full-time. The unemployment rate was unchanged at 6.9%.
Expectations had been for an increase of 13,500 jobs.
Well known Canadian economist Douglas Porter referred to the report as “unambiguously weak”, especially in light of the June employment report that showed 83,000 new jobs were created.
Some analysts feel this increases the likelihood of a Bank of Canada Policy Rate cut in September. They put the chances at 40%. However, Porter and many other economists do not expect July’s sudden jobs decline to change the central bank’s current stance on interest rates.
“[The Bank] will still need to see inflation slow notably over the next two prints for a September cut to be a high likelihood. We expect that the job market slack will put downward pressure on inflation, eventually, supporting the case for a return to modest rate cuts. And it appears that the trade uncertainty will be with us for some time yet,” Porter wrote in a client note.
The central bank has held its trend-setting Policy Rate at 2.75% since March.
Please note: The source of this article is from First National Financial LP.
