07:47 AM EDT, 08/12/2024 (MT Newswires) -- The Canadian labor market continues to deteriorate at a relatively slow pace, said Geoff Phipps, trading strategist and portfolio manager at Picton Mahoney after the release of Friday's Labour Market Survey (LFS).

The data showed a decline of 2,800 jobs in July, with particular weakness in private sector services, offset partially by growth in public sector full-time jobs.

The unemployment rate was flat at 6.4%, but there was a sharp drop in labor force participation. Wage growth slowed moderately to 5.2% but includes significant cost of living adjustments.

The Canadian labor market is "not collapsing," but data continues to align with the Bank of Canada (BoC) entering into an extended cutting cycle, stated Phipps.

Currently, the market has priced cuts for each of the next three meetings. according to Phipps, the risk to the current implied BoC policy path is a more rapid deterioration in growth and labor, which would open the door to the BoC having to consider 50 bps cuts at upcoming meetings, as it would be perceived to be behind the curve -- and may already be.