Canada: Unemployment Rate rises to 5.4% in June vs. 5.3% expected
|- Unemployment Rate in Canada rose to 5.4% in June.
- Net Change in Employment: 59,900 vs 20,000 expected.
- USD/CAD drops toward 1.3300 after jobs reports.
The data published by Statistics Canada revealed on Friday that the Unemployment Rate rose to 5.4% in June. This reading came in above the market expectation of 5.3%. The Participation Rate increased from 65.5% to 65.7%.
Further details of the publication revealed that the Net Change in Employment was positive by 59,900, surpassing analysts' estimate of a 20,000 increase and follows a 17,300 decline in May. The annual wage inflation arrived at 3.9% in June.
Key takeaways from the report:
- Employment rose by 60,000 (+0.3%) in June, following little change in May. The increase in June was the largest since January 2023. Employment growth had moderated from February to May (averaging 20,000 per month), following strong growth from October 2022 to January 2023 (averaging 79,000 per month).
- Employment gains in June were all in full-time work (+110,000; +0.7%), as the number of people working part-time fell (-50,000; -1.4%).
- The unemployment rate rose to 5.4% (+0.2 percentage points), as more people searched for work.
- The employment rate—the proportion of the population aged 15 and older who are employed—edged up 0.1 percentage points to 62.2% in June.
- Average hourly wages rose 4.2% (+$1.32 to $33.12) on a year-over-year basis in June (not seasonally adjusted). This was the slowest year-over-year growth in average hourly wages since May 2022. From February to May 2023, year-over-year growth in average hourly wages had hovered between 5.1% and 5.4%.
Market reaction:
The USD/CAD tumbled from the 1.3360 area toward 1.3300 following the Canadian and the US labor market reports. Nonfarm payrolls in the US rose by 209,000 below expectations of a 225,000 increase.
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