Today’s employment data was a reminder of how difficult it is to predict economic data. Despite the constant tariff noise, the Canadian economy is still producing jobs, with 83k added in June.
The numbers.
- 83.1k jobs created (zero expected)
- 13.5k full-time and 69.5k part-time positions.
- 47k private sector jobs created.
- 11k manufacturing jobs created (who saw that coming?).
- Unemployment rate 6.9% (7.1% expected)
- Participation rate moves up 0.1%
- The combination of lower unemployment and higher participation rates points to a stabilizing labour market.
- YoY wage growth cools to 3.2% (3.5% expected)
The implications.
With inflation drifting higher (over the past few months) and a resilient labour market, the Bank of Canada has the luxury of remaining on the sidelines. Unless the June inflation report (due Tuesday) comes in very weak, a July rate cut is pretty much off the table. As a result, Canadian yields are 5-10 bps.
