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Data released on Friday showed employment increased by 290K in May in Canada. Analysts at the National Bank of Canada point out the numbers were a positive surprise but they see significant slack in the labour market to stay for some time. 

Key Quotes:

“The labour market generated 290K jobs in May surprising consensus which was expecting a 500K loss. Despite this positive development, employment remains a massive 2.7 million jobs short from February’s level due to the public health recession. This represents a staggering 14% decline at the national level with divergences among provinces.”

“Despite significant employment gains, the unemployment rate rose to its highest level on record as the participation rate bounced back. It is obvious that there are still workers on the sidelines that are not in a particularly favorable situation to look for new opportunities.”

“We continue to think that a significant slack in the labour market is here to stay for some time. Even if the confinement  measures are mostly lifted, keep in mind that more than a fifth of total employment is inaccommodation and food services, arts and recreation and retail trade sectors which are facing significant challenges ahead.”