09:25 AM EDT, 08/08/2025 (MT Newswires) -- "The Canadian labour market's hot start to the summer appeared to be short lived," said Tiago Figueiredo at Desjardins on Friday, before adding "the economy is in need of more monetary stimulus."

In citing the Labour Force Survey, Figueiredo noted the economy shed 40.8K jobs in July, with losses primarily in the goods producing sector, notably construction. However, he noted, the services sector also saw concentrated weakness in recreation/cultural and business services. Nearly all of the jobs lost in July were in the private sector, with the public sector adding 4K jobs. But, Figueiredo also noted, employment in manufacturing continued to stabilize after several months of contraction earlier in the year.

Figueiredo noted the unemployment rate remained unchanged at 6.9% despite the drop in hiring, largely thanks to a decline in the participation rate. Youth unemployment rose to 14.6%, the highest level since 2010. However, the unemployment rate for those aged 25-54 remained unchanged at 5.8%. He said: "This is good news at the margin as this cohort tends to carry the most debt and is responsible for a larger share of consumption." He also noted participation rates fell across age groups, but the decline was more pronounced in the youth category. Separately, wage growth did accelerate over the month but remains below rates seen last year.

"The latest employment reading," Figueiredo added, "suggests that June's spike in hiring may have been an mirage and that the economy is in need of more monetary stimulus. With the unemployment rate loitering around cycle highs, GDP expected to contract in Q2, and a trade deal between the US and Canada looking further in the distance, we still expect the Bank of Canada to resume its easing cycle in September."