CIBC Private Wealth
May 14, 2024
Money Financial literacy Economy Professionals Commentary NewsMorning Market Brief
Last Friday, Statistics Canada reported the Canadian economy added the largest number of jobs in a single month in over a year. The result showed the resiliency of the Canadian labour market, which has been a source of consumer and economic strength coming out of the pandemic. However, the labour market has shown signs of cooling in recent months with job growth trailing population growth in Canada.
- The Canadian economy added 90,400 jobs in April, the most since January 2023. April’s increase was a strong rebound from the 2,200 job losses in March and was well above the 20,000 job additions economists had expected, based on a Bloomberg survey.
- Both full- and part-time jobs were added over the month. The professional, scientific and technical services industry added 26,000 jobs, and was closely followed by job gains totalling 24,000 in the accommodation and food services industry.
- Canada’s unemployment rate finished April unchanged at 6.1%. The number of unemployed persons increased in April. Despite relatively strong job gains in recent months, this has failed to keep up with the pace of population growth. As a result, Canada’s unemployment rate is at its highest level since October 2021.
- Market participants began to place their bets on when the Bank of Canada (BoC) might begin lowering interest rates. It was widely believed the BoC would begin in June, but that might be pushed back slightly to July given the outsized gains in job additions. Markets are still trying to determine what these job additions mean relative to population growth in the eyes of the BoC.
Before making any rate decisions, the BoC is likely to consider data that suggests the labour market remains relatively strong and is contributing positively to the overall health of Canada’s economy. A strong labour market typically points to a strong consumer, which is a net positive for economic growth. The BoC makes its next interest-rate decision on June 5.
If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.