06:59 AM EDT, 08/29/2025 (MT Newswires) -- Canada's less timely and less closely followed jobs report -- the SEPH -- was published on Thursday, indicating Canada shed 33,000 jobs in June, said National Bank of Canada.

That's in contrast to the 83,000 that were reportedly added in June, per the Labour Force Survey (LFS).

Discrepancies between the two reports are nothing new, noted the bank. Over the long run, they follow each other closely, but the gap has been particularly pronounced in recent years. The divergence isn't explained by conceptual survey differences.

Rather, National Bank sees the LFS overstating population growth, which is leading to overstated employment. To the bank, SEPH more accurately portrays underlying hiring.

The Bank of Canada and so markets don't put much emphazis

on labor market developments in the SEPH, which is why the rate reaction this morning was muted. However, SEPH components offer insight into how more closely followed jobs data will progress. National Bank is referring to job vacancies, a gauge of labor demand, and so future employment.

Technically, vacant jobs rose in June, but the increase was

modest and the number of open positions is lower than last year. The vacancy rate is in line with the 2017 levels, back when the BoC was just beginning to tighten policy from below 1%. In contrast to Canada, the United States vacancy rate has been stable around pre-pandemic levels for the past year despite the growing focus on downside labor market risks.

Empirically, changes in Canada's vacancy rate tend to lead changes in the unemployment rate. While historical data is a bit limited (beginning in 2015) and was discontinued briefly in 2020, the bank finds that correlations between changes in the vacancy and jobless rate are strongest with a roughly half-year lag, before COVID-19 or after.

National find similar lags when looking at U.S. data in the post-pandemic period. So, Fed officials and markets may be growing more anxious about the health of the labor market, but this measure on its own implies those concerns may be a bit overstated.

The same can't be said for Canada, where the year-to-date fall in the vacancy rate implies more labor market slack will accumulate.

Job vacancies did technically increase in June on a month-over-month basis. Could this be the start of rebuilding labour

demand? asked National Bank. The bank isn't so sure.

Alternative and more timely data on job postings (via Indeed) suggest labor demand waned over the course of the summer. Consistent with these findings, National Bank's base case outlook for the jobless rate involves a further increase through 2025 and the bank doesn't expect an improvement until next year.

For the BoC, inflation developments will be the single most important factor in coming decisions. However, if price pressures moderate as the bank expects, the Governing Council's focus can turn to the labor market, where greater policy support is needed.