U.S. job growth likely slowed in July, with the unemployment rate forecast rising back to 4.2%, but that probably would be insufficient to spur the Federal Reserve to resume cutting interest rates soon as tariffs are starting to fan inflation.

Statistics Canada on Friday reported 41,000 job losses last month, while economists had expected a slight gain. The unemployment rate was unchanged at 6.9 per cent in July as Statscan said the number of job seekers held steady month-to-month.

Canada’s labor market fell back to earth with a sharp drop in employment in July, putting a spotlight on the challenges the country’s job seekers continue to face.