Canada job gains blow past forecasts; wage growth slows
2024.05.10 09:05
OTTAWA (Reuters) – Canada’s economy added five times the number of jobs that were forecast for April and the unemployment rate unexpectedly held at 6.1%, but wages grew at the slowest pace in 10 months, data showed on Friday.
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%.
The gains – largest since the 110,000 jobs added in January 2023 – were a mix of part-time and full-time work, and entirely in the services-producing industries, data from Statistics Canada showed.
The Canadian dollar strengthened 0.3% to C$1.3640 to the U.S. dollar, or 73.31 U.S. cents.
The average hourly wage growth for permanent employees slowed to an annual rate of 4.8% from 5% in March. The wage growth rate – closely tracked by the Bank of Canada (BoC) because of its effect on inflation – is now the slowest since the 3.9% in June.
The slowdown in wages adds to signs that the economy is moving in line with the BoC’s projections, and could nudge the central bank toward lowering its policy rate from a 23-year of 5% in June.
The bank is looking at a broad range of indicators for evidence that inflation is heading toward a 2% target, and said last month that a rate cut in June was possible if a recent cooling trend in prices is sustained.
Money markets trimmed their bets on a June rate cut to 46% from 54%. They are now fully pricing in a cut in September compared to July before the report was released.
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Friday’s jobs reports showed that employment in the services sector increased by a net 100,700 jobs, led by professional, scientific and technical services as well as accommodation and food services. The goods sector lost a net 10,400 jobs, mostly in construction and agriculture.
The employment rate, or the proportion of the population who are employed, also held steady at 61.4% in April, after six consecutive months of declines, Statscan noted.
