Forecasting the next rate increase
The latest jobs performance could put pressure on the Bank of Canada to increase interest rates, according to one veteran.
“The employment gains bode well for the continuation of the country’s expansion, which is the fastest among the G7 countries, as Canada emerges from the oil price collapse and benefits from a soaring real estate market,” Dr. Sherry Cooper, DLC chief economist, wrote in her economic analysis of the jobs release. “It also could raise pressure on the Bank of Canada, which has recently sounded much more confident in the strength of the economy. Most economists anticipate a rate increase in the first half of next year.
“A separate report released Friday by Statistics Canada showed utilization of industrial capacity at the highest since 2007.”
The labour market rode a surprisingly strong wave of new jobs last month as hiring rose in key areas like the private sector, manufacturing and full-time work, Statistics Canada said Friday.
Overall, the country registered a net gain of 54,400 jobs in May, the agency's latest jobs survey found.
Behind that number, Canada saw a surge of 77,000 new full-time positions in May, which more than made up for a decline of 22,300 part-time jobs.
The national unemployment rate edged up to 6.6 per cent, a rise of 0.1 of a percentage point, as more people entered the job market in search of work.
Analysts not only applauded the above-expectations headline figures Friday -- they also highlighted most of the finer details in the report.
"There's a lot to like here,'' said TD senior economist Brian DePratto, who noted it added yet another good set of data to a growing stack of positive economic numbers in recent months.
"We think the Canadian economy is in a very good place right now.''
In his research note to clients, BMO's Benjamin Reitzes called the jobs survey "a solid report almost from top to bottom.''
Bill Adams, senior international economist for PNC Financial Services Group, called the details "glorious.''
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