Canada’s employment falls in May, jobless rate unchanged at 5.8 pct

Canada’s employment dropped in the month of May. Employment fell by 7.5k net positions. The jobless rate continued to stay at 5.8 percent, as slightly fewer Canadians looked for work. The subdued headline print was matched with weak details.

Full-time employment dropped by 31k net positions, while 23.6k part-time positions were added. In terms of employment types, the public sector added 12.9 k jobs, while private employment fell 4.8k. Self-employment also fell 15.6k, bringing the overall tally into negative territory.

Goods-producing industries led the way lower, shedding 29k positions due to weakness in manufacturing and construction. On the contrary, the service-sector continued to add jobs, with notable gains in accommodation and food services, and professional services.

Looking across the provinces, most of the decline could be due to B.C., where employment dropped 12.4k in May. Mixed performances were seen elsewhere.  Aggregate hours worked were effectively the same in May, leaving the year-on-year gain at 2 percent. Wages rose slightly, rising 3.9 percent year-on-year for permanent employees – the strongest rise since April 2009.

Overall, today’s report affirms the tightness of Canadian labor markets. Wage gains reached a nine-year high, undoubtedly aided by Quebec’s minimum wage rise, but the wider story of price pressures continues.

“The Bank of Canada may not be encouraged by all the details of today's report, but wage growth nearing 4% y/y will be certain to garner discussion. All told, there is little in today's report to alter our view that the Bank remains likely to hike its policy rate in July, switching into 'hold and assess' mode thereafter”, stated TD Economics in a research report.

At 16:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was slightly bearish at -66.6306, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -32.9273. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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