Canada’s job market is showing more signs of softening, giving the central bank some leeway to hold rates steady next week.

Job vacancies edged down 1.2% to 753,400 in June, from 762,300 a month earlier, their lowest in more than two years, Statistics Canada reported Thursday in Ottawa. The job vacancy rate eased to 4.2%.

The data add to evidence Canada’s labor market is cooling in an orderly fashion. June’s decline brings the net decrease in vacancies to 249,900 from a record high of a million in May 2022. The vacancy rate has also trended down since peaking at 5.7% around the same time.

It also marks progress along a key metric tracked by Governor Tiff Macklem and his officials as they attempt to slow the economy without inflicting unnecessary harm.

Macklem referenced the inverse relationship between the job vacancy rate and the unemployment rate — known as the Beveridge curve — in a speech last November, saying record job vacancies meant the jobless rate might not need to rise as high as historical levels suggest in order to reduce excess demand.

With the unemployment rising modestly to 5.5% in July, from 5.4% in June, and the job vacancy rate falling, the Beveridge curve points to Canada’s labor tightness is easing at a pace more consistent with a so-called soft landing, and the correlation is on track to soon reach pre-pandemic levels.

Policymakers set the overnight rate next Wednesday. The majority of economists in a Bloomberg survey expect them to keep benchmark borrowing costs at 5%, and most think the central bank is finished tightening monetary policy.

In June, the largest monthly declines in vacancies were in finance and insurance, accommodation and food services, and the construction industry. But vacancies in health care and social assistance rebounded, and the sector also saw the largest monthly increase in payroll employment.

“There were signs of a loosening in labor market conditions” that extend the recent downward trend in vacancies, Katherine Judge, an economist at Canadian Imperial Bank of Commerce, said in a report to investors. She cautioned, however, that wage gains remain higher than Macklem would like.