Canada’s unemployment rate reached a 29-month high of 6.4%, indicating job losses as the labor market struggles to accommodate a rapidly growing population.

The Bank of Canada (BoC) is expected to cut rates this month to around 56%, raising bets that the country may be flirting with recession.

The unemployment rate has risen by 1.4 percentage points since January, and economists believe that a sustained deterioration is typically only seen during recessions.

Statistics Canada reported that Canada shed a net 1,400 jobs in June, indicating a weakening economic situation.

The BoC will lower rates by 25 basis points this month and another two in the three sessions that followed.

The Bank of Canada Governor Tiff Macklem stated that a significant increase in unemployment was not necessary to achieve the central bank’s objective of reducing inflation, as the labor market has cooled off somewhat in recent months.