Employment table in Canada, March 2024
Canada’s jobs report showed a drop of 2.2K jobs in February, worse than the +25K expected. The result is even worse than it seems if we consider the galloping growth of Canadian immigration which has led to an increase in the unemployment rate from 5.8% to 6.1%. This is the highest since 2017.
“The cracks that were slowly emerging in the Canadian labor market suddenly widened in March,” writes CIBC. “By sector, weak overall employment reflects declines in accommodation and food services as well as retail and wholesale, suggesting that weak consumer spending is impacting plans hiring.”
They note that the population increased by 91,000 during the month and the labor force increased by 58,000.
“While GDP is expected to weaken in the second quarter after a surprisingly strong start to the year, we expect the labor market to slow further, with the unemployment rate peaking at nearly 6.5%. However, interest rate cuts starting in June are expected to lead to a reacceleration. growth, which will help stabilize the labor market during the second half of the year and until 2025,” writes CIBC.
The market is pricing in a 74% chance of a rate cut on June 5 and 73 basis points of easing this year.
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