May 27th, 2024

Employment jumps by 90,000 in April, raising doubts about June interest rate cut

By Nojoud Al Mallees, The Canadian Press on May 10, 2024.

Statistics Canada building and signs are pictured in Ottawa on Wednesday, July 3, 2019. Statistics Canada is set to release its April labour force survey this morning. THE CANADIAN PRESS/Sean Kilpatrick

OTTAWA – Canadian employers added 90,000 jobs in April, far surpassing forecasters’ expectations and marking the largest employment gain in more than a year.

Statistics Canada released its labour force survey on Friday, which says the jobless rate held steady at 6.1 per cent last month.

The agency says the April employment gains were driven by part-time work.

“Today’s showy headline jobs increase will give the Bank of Canada some pause, since it reinforces the point that the economy is clearly not rolling over,” wrote BMO chief economist Douglas Porter in a client note.

The April employment gain was the largest monthly increase since January 2023.

Economists have been widely expecting the central bank to begin lowering its policy rate in June or July. But the latest employment numbers have made financial markets less certain an interest rate cut will materialize next month.

“Still, the reality is that economic slack is still rising,” Porter noted, adding that the Bank of Canada may focus more heavily on the longer-term trends.

The unemployment rate is up a full percentage point from a year ago as population growth outpaces job creation.

Statistics Canada’s Friday report says that compared with a year ago, unemployment is up across all major demographic groups, with youth taking the largest hit.

Meanwhile in April,employment increased in professional, scientific and technical services, accommodation and food services, health care and social assistance as well as natural resources.

Employment fell in the utilities industry.

Wage growth slowed last month to an annual pace of 4.7 per cent, down from 5.1 per cent in March.

The Bank of Canada’s next interest rate decision is scheduled for June 5.

Its key interest rate currently sits at five per cent, the highest it’s been since 2001.

This report by The Canadian Press was first published May 10, 2024.

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