Inflation in Canada nudged higher in June, rising to 1.9% from 1.7% in May, driven by modest increases in the cost of durable goods, clothing, and shelter. On the surface, the picture appears relatively calm — prices are no longer surging, and energy and food costs have cooled. But a deeper look reveals that the pressure hasn’t fully eased. And for the Canadian job market, especially the staffing industry, the story is far from settled.
Despite the slight rise in overall inflation, the country also saw a modest rebound in job growth, with 83,000 new jobs added in June, nudging the unemployment rate down to 6.9%. That’s a welcome shift after months of weakening labor market conditions — but the gains were largely part-time, and the long-term picture remains fragile.
What really matters for the Bank of Canada — and by extension, for hiring trends — isn’t just headline inflation. It’s what's happening underneath. That’s where two measures, CPI-trim and CPI-median, come into play.
Unlike the headline CPI, which includes volatile items like gasoline and produce, these core inflation gauges strip out outliers and offer a clearer view of how prices are behaving across most of the economy. In June:
CPI-trim held steady at 3.0%
CPI-median rose to 3.1%, up from 3.0% in May
Both remain well above the Bank of Canada’s 2% target. That means inflationary pressures, particularly in services and wage-driven sectors, are still alive and well — even if your grocery bill looks better than it did a year ago. So what’s still driving prices up?
Durable goods like cars and furniture became more expensive, suggesting demand hasn’t fully cooled.
Shelter costs — especially rent and mortgage interest — remain stubbornly high, even if no longer rising at double-digit rates.
Clothing prices rose after months of discounting.
Food prices have stabilized but remain elevated in key categories like meat and dairy.
Gasoline and energy prices continued to fall, helping headline numbers but offering only temporary relief.
In short: the things that change quickly are improving. The things that are hard to fix — housing, wages, and services — are still stuck.
June’s job gains may have eased some concerns, but they didn’t fundamentally change the outlook. The increase in employment was concentrated in part-time roles and a handful of industries like healthcare, retail, and manufacturing. Meanwhile, long-term unemployment remains elevated, and full-time job creation is still lagging.
Employers, still facing higher borrowing costs and uncertainty around interest rate policy, are hesitant to commit to permanent hiring. That’s especially true in sectors like:
Finance and tech, where job growth has been soft for over a year on the permanent side
Retail and consumer goods, which are sensitive to household spending and credit conditions
Construction and real estate, still weighed down by high interest rates
For staffing firms, the message is clear: flexibility wins in this market.
Permanent placements are slowing as companies take a wait-and-see approach to headcount.
Temporary and contract roles are holding up well — and in many industries, they’re growing. Employers want flexibility without long-term commitments.
Healthcare, logistics, public services, and infrastructure continue to rely heavily on staffing support to fill persistent labor gaps.
Wage expectations remain high in many services roles, especially where demand remains steady. Firms will need to adjust pay rates and billing margins accordingly.
With core inflation stuck around 3%, the Bank of Canada is unlikely to cut interest rates before the fall — and may not move at all until the end of the year. For now, the cost of borrowing remains elevated, and with it, the caution in corporate hiring plans.
Staffing firms should prepare for a slow and uneven recovery, with pockets of opportunity but no broad-based rebound just yet. The road ahead favors firms that are nimble, industry-savvy, and tuned in to shifting employer needs.