TD Macro Research expects the Canadian labour market to soften in June, with employment unchanged versus market expectations for a 10k gain after May’s 87.8k surge. They see the unemployment rate steady at 6.6% and wage growth for permanent workers rising modestly to 3.6% year-on-year, only partly reversing May’s sharp deceleration.

Jobs surge seen mean-reverting

"We look for the Canadian labour market to return to a softer footing in June with employment forecast to remain unchanged (market: +10k) after the creation of 87.8k jobs last month as the unemployment rate holds at 6.6% with a stable participation rate."

"Monthly business surveys have been mixed over June, with a pullback in small business hiring intentions contrasting with the more upbeat performance in the S&P PMIs."

"However, mean reversion will provide the more powerful driver for the softer print with last month's performance standing in stark contrast to the 6m trend of mild job losses."

"Wage growth should see a modest increase to 3.6% y/y for permanent workers, although this would unwind only a small portion of the deceleration in May."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)