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Special Report

Canada Employment
Research Brief

May 2024

Mixed Employment Results Temper Market
Expectations for First Interest Rate Cut

Labour market outperforms. Canada’s economy added 90,400 jobs in April, which was well above the consensus estimate of 18,000 and represented the largest monthly increase since January of last year. While this strong headline reading could push back the timing of interest rate cuts, underlying data continued pointing to a loosening labour market. The surge in employment was not enough to bring unemployment down as the jobless rate held at 6.1 per cent amid ongoing population gains outpacing job creation. This has brought labour supply and demand back to a more balanced level, causing year-over-year growth in average hourly earnings to drop to 4.7 per cent in April. This softening in wage growth leaves the door open for a June interest rate cut. However, this strong labour market print pushed back the market-implied view, with July now being priced in as a more likely time to cut first.

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