Canada’s unemployment charge surged to six.1% in March, pushed largely by inhabitants positive aspects outpacing job progress.

Statistics Canada reported a internet lack of simply 2,200 positions in March, however rise within the nationwide unemployment charge to a two-year excessive of 6.1%, up from 5.8% in February. A consensus of economist forecasts had anticipated a studying of 5.9%.

The job losses have been concentrated to 3 provinces, Quebec (-16,700), Saskatchewan (-9,900) and Manitoba (-2,700), whereas the entire different provinces noticed job progress, led by Ontario (+56,600).

“The massive story is the rising jobless charge, ensuing from robust inhabitants/labour power flows that even stable job positive aspects aren’t absorbing,” famous BMO senior economist Robert Kavcic.

In 2023, Canada’s inhabitants grew sooner than it has at another time since 1953, surging 3.2% to 40,769,890 as of January 1 of this yr.

A report from Oxford Economics famous that the working-age inhabitants of these 15 and older rose 90,700, or +0.3%, in March, attributable to continued power in worldwide migrant inflows into Canada.

“We anticipate the labour market will proceed to weaken within the months forward as hiring slows and layoffs mount,” the report reads. “This, along with robust immigration-led labour provide progress, and a partial retracement of the participation charge, will seemingly push the unemployment charge to the 7.5% vary later this yr.”

Others, like CIBC’s Andrew Grantham, see a extra modest rise within the unemployment charge.

“With GDP anticipated to weaken in Q2 following the surprisingly robust begin to the yr, we’d anticipate to see additional softening within the labour market with the unemployment charge peaking shut to six.5%,” he wrote. “Nevertheless, rate of interest cuts beginning in June ought to convey a re-acceleration in progress, which can assist to stabilize the labour market within the second half of the yr and into 2025.”

What this implies for the Financial institution of Canada’s upcoming charge selections

Immediately’s labour report isn’t anticipated to alter a lot by way of the anticipated timing of the Financial institution of Canada’s first charge lower, with most forecasts and market pricing nonetheless pointing to the Financial institution’s June assembly.

“Immediately’s report casts a cloud over the Canadian financial system, however it’s unlikely to alter the Financial institution of Canada’s pondering when it meets subsequent week,” wrote TD Economics senior economist James Orlando.

Whereas he says that whereas latest knowledge exterior of in the present day’s employment report have been robust and offered the BoC extra time to attend and monitor the impacts of its charge hikes to this point, “markets are more and more betting that the BoC will pull the set off on its first charge lower in June.”