TD Securities economists expect Canada’s May employment to rise by 5k versus the market’s 10k, after an 18k loss in April, with the unemployment rate steady at 6.9%.
They note mixed business surveys, confirmed job losses in payroll data, and forecast slower wage growth at 4.4% y/y, reinforcing a dovish backdrop for the Canadian Dollar (CAD)
Jobs and wages to cool further “We look for employment to rise by 5k in May (market: +10k) for a modest rebound from the 18k jobs lost in April as sluggish population growth helps keep the unemployment rate stable at 6.9% (market: 6.9%).” “Business surveys have painted a mixed picture for hiring, with a sharp pullback in small business hiring intentions while the April PMIs were more upbeat on the employment outlook.” “However, payroll employment has also confirmed material job losses over Feb/Mar, which raises the bar for mean reversion in the May LFS.” “Softer wage growth should add to the dovish tone, with AHE [Average Hourly Earnings] forecast to slow 0.4pp to 4.4% y/y, along with another deceleration for the 6m hiring trend as the stronger performance from Q4 hiring moves further into the rearview mirror.” Author