Supply Side Keeps Up With Surprisingly Strong Jobs, June BoC Seen As 50/50

The April labour report was a reminder of the volatility that this data can see but also the large supply side gains that are more than keeping up with employment growth. This should help limit the market reaction to the beat, although BoC-dated OIS has still shifted closer to a 50/50 or even slightly lower odds of a cuts at the June meeting. The report adds weight to the upcoming CAD CPI on May 21.

• Employment growth was far stronger than expected in April at 90k (cons 20k) in a strong bounce-back from the surprisingly soft -2k of March.
• Both full-time (+40k) and part-time (+50k) contributed strongly.
• However, labour force growth was particularly strong at 108k after 58k, with unusually high and almost complete passthrough from the 112k increase in working age population after the 91k increase in March.
• That meant the unemployment rate still technically increased to 6.13% (cons 6.2) after 6.08% in March, and consolidates the prior large surprise jump higher. It also sees the three-month average rate continue to trend higher for now 1pp increase over the previous twelve months (vs the 0.3pp equivalent in the US).
• Wage growth cooled but by less than expected for the Bloomberg survey on permanent employees, from 5.1% to 4.8% Y/Y (cons 4.7%).
• Other wage growth metrics included overall average hourly wage growth easing from 5.1% to 4.7% Y/Y, and full-time wage growth eased from 5.0% to 4.6% Y/Y. In all cases it’s the softest wage growth since Jun 2023 but it remains firmly in the 4-5% range that the BoC has warned about.