Canadian employment growth to have paused in June, jobless rate likely stable at 6.5 pct

Canada’s employment growth is likely to have taken a breather in June after rising strongly in the earlier two months, noted TD Economics in a research report. Small business confidence and hiring intentions have eased after peaking in May and survey data has indicated towards more subdued hiring conditions in manufacturing.

The report details are expected to show a relative outperformance in goods-sector hiring mainly due to a pullback in professional services that is coming off its strongest two-month gain on record with 53k added jobs in May and June. Also, a continuation of last month’s rotation towards part time employment is expected.

Seasonal patterns tend to underpin part time hiring in July and part time employment continues to be well below its peak level from January in spite of full time payrolls adding 175k employees since.

According to TD Economics, Canada’s jobless rate should remain stable at 6.5 percent as long as labor force growth does not surpass 20k, which is unlikely after the 0.3 percentage point rise in the participation rate in the last two months. Wage growth is likely to have rebounded on the lagged impact of reduced slack but any improvement should be marginal.

At 22:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was neutral at -15.209, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -20.2258. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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