Canadian employment rises modestly in May, jobless rate falls to 5.4 pct

Canadian employment recorded modest gains in May. A net 27.7k more Canadians were at work. Participation rate dropped in the month following strong rises so far in 2019. The drop was enough to pull down the jobless rate to 5.4 percent – the lowest it has been since at least 1976.

Composition came in somewhat mixed. The gains were entirely full-time, but both the public and private sector shed jobs, leaving a 61.5k rise in self-employment the driver of job growth. The service sector led the way, aided by gains in health care, professional services, and transportation. Goods-producers added 4.9k on generally modest performances from the main sub-sectors.

Looking at the provinces, performances were generally modes. Rises recorded in Ontario and B.C. were partially countered by generally modest performances elsewhere and a small fall in Quebec. Wage gains came a bit ahead of expectations. It remained stable at 2.6 percent on a year-on-year basis for permanent employees. Total hours worked dropped for the fourth time in six months, down 0.3 percent.

“Some sort of pause/slowdown was to be expected eventually given the recent strength in hiring that has not been matched elsewhere in the economic data. We hope for a better composition, but today's report is consistent with our view of a more moderate pace of hiring going forward. For the Bank of Canada, today's report will serve to reinforce their cautious approach. Recent communication attributed weakness in hours worked to caution among employers. That caution clearly remains, and with trade uncertainty elevated, expect the Bank of Canada to stay on the sidelines for some time”, stated TD Economics.

At 15:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was highly bullish at 137.037 while the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -100.591 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex