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Economics

The Daily Chase: Unemployment rate hits 7%

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Here are five things you need to know this morning

Unemployment rate hits 7%: The Canadian economy added a modest 8,800 jobs in May, and the unemployment rate edged up to seven per cent. It’s the third straight month the jobless rate rose, hitting its highest level since September 2016, not including the pandemic period. As Randy Thanthong-Knight of Bloomberg News points out, May is the fourth straight month where the economy either saw very little change in employment or job losses. Since February, the labour market has lost 15,300 jobs as a result of firms slowing down hiring, downsizing or laying off due to U.S. tariffs on Canadian auto, steel, aluminum and other sectors. The jobless rate jumped 0.4 percentage points over that period.

Tesla rebounds in wake of Musk-Trump squabble: Shares of Tesla traded about four per cent higher in the pre-market after plunging by 14 per cent yesterday as CEO Elon Musk engaged in a public spat with U.S. President Donald Trump. Today’s cautious rebound comes after Musk suggested he was open to a truce with Trump. However, Bloomberg News is reporting there are no plans for a call between the White House and Musk. A social media war erupted between the two men after Trump asked Musk to leave the administration over his criticism of Trump’s tax policy. Yesterday’s plunge in Tesla’s stock price cost Musk about US$34 billion.

Lululemon plunges after forecast cut: Shares of Lululemon traded down by as much as 20 per cent in the pre-market after the Vancouver-based activewear-maker cut its full-year earnings forecast. As well, Lulu’s sales and profit estimate for the current quarter was below analyst expectations. There were also trouble signs in the quarter just ended, including a decline in comparable-store sales in the Americas. The company says U.S. tariffs imposed in April have raised the cost of doing business in the country and could cause “a significant reduction” in profitability. Lululemon, which usually charges around $100 or more for its popular leggings, will raise some prices in response.

Engine to vote against Parkland takeover: Activist investor Engine Capital plans to vote against Sunoco’s proposed takeover of Calgary-based Parkland. Engine says the deal undervalues Parkland and the fuel distributor could increase the value of its assets by marketing them separately. Engine Capital has requested a meeting with Parkland’s board. Sunoco made an offer last month to buy Parkland for US$9.1 billion.

Carney speaks with Li: Prime Minister Mark Carney spoke with Chinese Premier Li Qiang on Thursday in a sign that the tense relationship between the two nations might be improving. The two covered a range of topics including trade, fentanyl and efforts to make communication between the two countries more regular. Canada brought up trade concerns that are impacting agricultural exports, particularly canola and seafood.