CIBC Research discusses its reaction to today's Canada jobs report for the month of June.
"When an inflationary overheating is the number one concern, bad news can be good news, so Canada’s jobs decline in June could be considered a bit of welcome relief. But the 43K decline in employment was to some extent offset by a reduction in labour force participation, which had the unemployment rate diving to 4.9%. Moreover, hours worked were up 1.3%, so this wasn’t an unambiguous sign of a an economic slowdown. Hourly wages jumped to a 5.2% year on year pace (from 3.9%) , and while this is the least accurate of Canada’s various wage indicators, it adds to evidence that wage inflation is heating up in Q2. Jobs declines were centred in self-employed and service sector positions, which tend to have lower output per hour.
"All told, a mixed bag in what’s often a volatile series, and on its own, the headline jobs decline isn’t yet convincing evidence of a slowdown that will deter the Bank of Canada from a 75 bp hike next week," CIBC adds.