Canada job gains blow past forecasts
OTTAWA: Canada’s economy added five times the number of jobs that were forecast for April and the unemployment rate unexpectedly held at 6.1 per cent, data showed, dampening market bets for a June rate cut.
The economy added a net 90,400 jobs while analysts polled by Reuters had forecast a gain of 18,000 jobs and the unemployment rate to rise to 6.2 per cent.
The gains - largest since the 110,000 jobs added in January 2023 - were a mix of parttime and full-time work, and entirely in the services-producing industries, data from Statistics Canada showed.
Analysts said the data might prompt the Bank of Canada (BOC) to think twice about when to start cutting rates from their current 23-year-high of 5 per cent.
Money markets trimmed their bets on a June rate cut to 48 per cent from 54 per cent. They are now fully pricing in a cut in September compared to July before the report was released.
“Certainly this raises the bar for a very nearterm rate cut and I think it speaks to how the balance of risks really does support the Bank of Canada potentially waiting until July,” said Andrew Kelvin, chief Canada strategist at TD Securities. The Canadian dollar strengthened 0.3 per cent to C$1.3640 to the US dollar, or 73.31 US cents.
The average hourly wage growth for permanent employees slowed to an annual rate of 4.8 per cent from 5 per cent in March.
The wage growth rate — closely tracked by the BOC because of its effect on inflation — is now the slowest since it dipped to 3.9 per cent in June. The slowdown in wages adds to signs that the economy is moving in line with the Boc’s projections.
Doug Porter, chief economist at BMO Capital Markets, said the jump in employment was not a total surprise, given healthy Canadian population growth.