​Long awaited economic slowdown has begun: Economists

Canada's weaker than expected jobs data in July is a sign that the country's economy is beginning to cool, one economist said.

Another economist agrees with that sentiment.    “I think they (the Bank of Canada) have sufficient reason to not hike and stay on the sidelines because that unemployment rate has risen about 50 basis-points in a fairly short period,” Beata Caranci, chief economist at TD Bank, told BNN Bloomberg in a TV interview on Friday.    While Caranci pointed to the general volatility of monthly jobs data, she did note that the rise in wage growth will be a particularly worrying figure for the central bank.    “Wages rising at five per cent — they will not like that. That is not consistent with inflation being sustained at two per cent,” she added.    Wage growth, though a lagging economic indicator, usually needs to hover around the three per cent mark for inflation to cool, she added.    As for the heightened unemployment rate of 5.5. per cent, Caranci attributed this to an imbalance between supply and demand for labour.    “The labour force is rising at a faster rate then Canadian companies can pump out on the jobs side,” Caranci said.