Not only is the headline number impressive, the details of last week’s May jobs report are stunning. Private jobs recovered more than last month’s losses, registering its strongest gain in two years. Canadian employment increased 55,000 in May 2017 according to the Labour Force Survey, well above consensus which was looking for a rise of only 15,000. Among paid jobs, the private sector posted a massive 59,000 job gain while government showed a decent increase as well as a 9,000 job increase. Enjoy a thorough review of the improving economic data from our partners at National Bank Economics: Read more: https://www.nbc.ca/content/dam/bnc/en/rates-and-analysis/economic-analysis/weekly-economic-watch.pdf
What does this mean for interest rates?
While the Canadian economy is picking up, uncertainty about U.S. policies is weighing on investment plans of Canadian businesses. A rate hike is predicted in Canada and with even greater certainty expected in the later half of 2017 in the U.S. However, slack in the Canadian economy is still translating into “below-target inflation of 2%”, Senior Deputy Governor Wilkins said, and risks to the economic outlook remain. Slack in the economy remains and inflation is below target. The Bank of Canada expects the output gap to close in first half of 2018. Read More from Senior Deputy Governor Wilkins