Surprise drop in June jobs doesn't change the picture for the Bank of Canada: Economist
The Canadian employment market slowed in June, with the economy shedding 2,200 jobs despite an expected gain of 10,000.
Here’s what experts are saying about June’s downswing and what it could mean for future rate decisions for Canada’s central bank.
“After a string of stellar economic releases in recent weeks, June jobs couldn’t extend the streak. However, it doesn’t take much digging below the surface to find signs of underlying strength... For the Bank of Canada, the strength in wages and hours, and a still-low jobless rate will give them no reason to seriously consider matching Fed rate cuts anytime soon.”
- BMO Capital Markets Chief Economist Doug Porter
What do you think the Bank of Canada’s next move will be?
“The Bank of Canada will probably be more focused on the pick-up in wage growth rather than the slight dip in employment, particularly when core inflation is showing signs of creeping above target. Interest rates are bound to remain unchanged for a few months, particularly with the US economy not spiraling into the abyss as some feared.”
- Capital Economics Chief North American Economist Paul Ashworth
“The surge in wage growth is sure to catch the attention of the Bank of Canada. One of the issues puzzling policymakers over the last few years has been the lack of pickup in wage growth despite historically low unemployment rates. In Canada, oil industry woes has been blamed for depressing national wage growth. With the June data this no longer seems to be a factor.”
- TD Economics Senior Economist Fotios Raptis
“Canadian job creation had been running at what seemed like an unsustainable pace, but stopped to take a bit of a breather in June... Still, the market won’t pay too much attention to the pause in hiring, given that job growth over the past year, and in Q2, looks blazing hot.”
- CIBC Senior Economist Royce Mendes
“The 2,000 [job] loss really doesn’t change, I don’t think, the picture at all, especially for the Bank of Canada. Our labour market continues to be very strong. We continue to see full-time jobs being created. We’re starting to see some traction on the wage front. So, all of that, I think, is good news for the economy. It suggests that we do continue to live with a very healthy labour market.”
- RBC Deputy Chief Economist Dawn Desjardins