🇨🇦Cable FX Macro Weekly Note: Canada June Labour Report

**As seen in Risk In The Week report 07/02/23, subscribe at cablefxm.co.uk/reports

The Canadian economy shredded 17.3K jobs in May, the net labour change was a surprise as economists had seen an addition of 21.3K jobs, this was the first labour market contraction recorded since August. The unemployment rate ticked up to 5.2% from 5.0%, this was slightly higher than the consensus of 5.1%, the participation rate came in unchanged at 65.5%. Breaking down the numbers, the goods-producing sector added 22.8K jobs, but these were not enough to offset a decline of 40.1K from the services sector, business and retail saw the largest declines. The June report will help the central bank asses the situation in the economy as it resumed its tightening campaign in June, the BoC lifted its overnight benchmark rate by 25bps to 4.75%.

The desk at ING noted that as long as the unemployment rate stays at relatively low levels, corporates may look at this as an opportunity to push higher prices to restore profit margins. ING sees prior month jobs losses reversing as it expects a headline figure of 15K, they forecast the unemployment rate to drop to 5.1%. Analysts at RBC said that employers continue to report labour shortages, however, they pointed to job openings falling 21% from peak levels as a sign of relief. RBC sees the jobless rate ticking higher to 5.3% and net employment rising by 20k, their call is in line with consensus.