‘We had held on to our October forecast for a Bank of Canada rate hike, but concede that’s likely to end up off the mark, as today’s jobs numbers cement the case for the central bankers to raise rates in the coming week.’ – Avery Shenfeld, CIBC
Canadian employment rose more than expected last month, setting stage for the Bank of Canada to make an interest rate hike. Statistics Canada reported on Friday that the Canadian economy created 45.3K jobs in June, following the preceding month’s 54.5K gain and surpassing analysts’ expectations for an 11.5K increase. The report showed that employment growth was mainly supported by faster part-time job creation, with 37.1K positions added last month, compared with an 8K rise in full time jobs. Meanwhile, the unemployment rate dropped to 6.5%, while analysts expected to see an unchanged reading of 6.6%. In regional terms, the largest job creation was registered in British Columbia and Quebec, where unemployment rate remained at 6%, the lowest level since 1976. Strong data provided some confidence for the Bank of Canada to raise interest rates this week. Moreover, some analysts anticipate the next rate hike in October 2017 to reverse two rate cuts made in 2015, which helped the Canadian economy to confront the effects of the slump in oil prices.
