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Canada’s economy gained 60,000 jobs in June, tripling forecasts, but the unemployment rate ticked up to 5.4 per cent as more people searched for work.
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Gains in full-time work drove the increase. Economists had been expecting a gain of 20,000 jobs.
However, there were also signs that the labour market is loosening.
This is the second month in a row that the jobless rate has risen, bringing it to its highest rate in more than a year, said Statistics Canada on July 7. It still however remains below the pre-pandemic average of 5.7 per cent.
Wage growth also softened last month, rising 4.2 per cent from a year ago, compared with the 5.1 per cent gain year over year in May.
“The surge in employment in June suggests that another rate hike at the Bank of Canada’s meeting next week is nailed on,” wrote Olivia Cross, an economist with Capital Economics, after the data was released.
“That said, with the unemployment rate also increasing and wage growth easing, we remain convinced that the Bank will not need to raise its policy rate above five per cent.”
TD senior economist Leslie Preston said if the Bank does skip a meeting and hold its rate on July 12 “their tone is likely to remain hawkish, and a September hike would remain on the table.”
More to come …
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