TORONTO: Canada’s economy added 54,500 jobs in May, mostly in full-time employment, Statistics Canada said on Friday. The jobless rate rose to 6.6 percent in May from 6.5 percent in April as more people sought work. The services sector added 31,300 jobs, with gains in the professional, scientific and technical services sector. The goods producing sector added a net 23,300 jobs, mostly in manufacturing. “Another stronger than expected Canadian jobs report – it’s becoming all too familiar.” “It’s just supporting what we’re seeing across the economy, as the economy continues to surprise on the upside – off to a very strong start this year, after a pretty remarkable second half of last year. We’re just seeing the strength in the economy reflected in a rapidly improving labor market.”
“Unlike some recent months, the skew in jobs was quite favorable in May, with full-time accounting for all of the increase and private sector jobs also accounting for all of the net increase in employment.” “We should see the loonie pick up on the back of this report.” “Certainly, the Bank of Canada will find it difficult to ignore a fairly steady stream of positive indicators we are seeing for the economy and the labor market. The only wrinkle is the slight back up in the jobless rate, but that was following a pretty significant decline the previous month, and it backed up for a pretty good reason: more people looking for work.” “I think the report could advance the odds of an earlier Bank of Canada rate increase. Now, we’re still seeing fairly subdued wage and inflation pressures in Canada and still a lot of uncertainties about the outlook for exports in light of the protectionist threat, which may keep the Bank on the sideline this year, but clearly the odds are shifting toward an earlier Bank of Canada rate increase.”
“It was bullish all around, all the details reinforced the headline beat and I think one of the keys is that we’re carving out a bottom on wage growth. Tying it back to the Bank of Canada’s inflation outlook, that’s to me the more relevant piece of information. It’s important not to get too carried away, we doubled but wage growth is still only 1 percent in nominal terms which means it’s still falling in real terms, so it’s still disinflationary at the margin, but at least the worsening trend has stopped.” “It ever so slightly suggests that disinflationary pressures from the wage side of the equation are stopping and that we’re very gently taking a step in the other direction, but to me on balance it just reinforces a neutral as opposed to a dovish bias at the Bank.”
“Everything looks pretty strong. Obviously the headline number is eye-catching. The goods/services split is healthy; manufacturing is up 25,000 jobs; full-time was up 77 (thousand); … the private/public split was favorable; self-employment down, which is favorable. Wage inflation is still objectively low at 1 percent year-over-year, but it is up from April. It is really hard for me to find something negative in this.” “If you look at the sort of GDP growth we’ve had over the last three quarters we’ve seen and with Q2 (growth) tracking quite strongly just given the handoff from March, it is just another piece of information that suggests that the Bank of Canada could be tightening maybe a little bit earlier than markets are pricing.”