The underlying softness in Canada's job market reasserted itself in April, said Bank of Montreal (BMO).
It's true that some of the big cooldown in employment growth simply reflects the near-stall in the labor force, which was up just 0.4% year over year, noted the bank.
But there are plenty of signs that labor demand is "chilly," stated BMO.
Most notably, full-time employment fell for the third month in a row and is now down in seven of the past 10 months.
Accordingly, total hours worked are now down 0.5% from year-ago levels, according to the bank. That's not quite recession terrain, but it would typically be associated with real gross domestic product growth of little more than 0.5%.
Consensus is still expecting the Canadian economy to grind out growth of 1% or more this year, which will require a "nice" pick-up in productivity, added the bank.
BMO also pointed out that there has never been a case in more than 30 years in which the Bank of Canada has hiked interest rates when hours worked were falling year over year.