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Canada's Latest Jobs Data "Gives Further Compelling Reasons To Fade the Current Rate-hike Expectations", Says Rosenberg Research

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Canada's April Labour Force Survey showed a loss of 17,700 jobs, now shedding jobs in three of the past four months, and stunning a consensus that expected a moderate 10,000 gain, noted Rosenberg Research after Friday's LFS.

This completely wiped out the tentative March gains and takes total jobs lost in 2026 to 112,300, noted Rosenberg Research. Employment decline so far this year is running at a 1.6% annualized pace, a recessionary number last topped in January 2021 in the depths of the COVID-19 pandemic -- and before that, April 2009, it said.

According to Robert Embree, who wrote the note, the "truly disturbing number" was the drop in full-time employment: some 46,700 jobs were lost, and with losses in each of the last three months, Canada is down a total of 156,200 full-time jobs. That's a 0.9% drop, not annualized, in full-time employment, which is almost one in 100 full-time jobs "vaporized" in a three-month stretch.

March and April both featured large hits to consumer spending due to the gasoline price shock, but this huge drop reflects a perfect storm of bad economic conditions: pinched consumer wallets, lingering trade and tariff uncertainty, a Bank of Canada that has been behind the curve and low structural growth to begin with, the research said. It's hard to reconcile the inflationary fears of BoC hawks with the incredibly soft labor market revealed in this LFS, it added.

Bottom line for Rosenberg Research: Everything in April's employment and wage data suggests that any inflation will be fully transitory and hit the wall in a collapsing labor market. The rate-sensitive sectors would be crushed by any hikes, and this report gives further compelling reasons to fade the current rate-hike expectations which are priced into the market.

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TD Expects Canada Labour Force Increases To "Lose Steam" In Coming Months, Capping Further Rises In Jobless Rate

A modest drop in employment coupled with a sizeable jump in the labour force drove up the unemployment rate two ticks this month, noted TD Economics in looking at the key implications of today's employment data for April.Although the monthly data reflect a high degree of variability, the persistently elevated unemployment rate is reflective of a job market that continues to struggle to absorb labour supply, TD said. "In the coming months we expect the labour force increases to lose steam and help cap further rises in the unemployment rate," the bank added.TD noted the economic outlook is "far from rosy" and the ongoing slack in the labour market is reflective of an economy that is still struggling to gain traction. "However, with the labour market still soft, the ability of firms to pass on cost increases from the inflation shock to consumers is more limited," it said, adding: "This is a key factor that underpins our view that if the sharp rise in oil prices begins to reverse in the coming weeks, the Bank of Canada will be able to stay on hold this year."

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CIBC Says "Weak" Labor Market in April Strengthens View Central Bank to Stay on Hold With Rates for Rest of Year

The Canadian labor market continued its "weak start" to 2026 in April, with a third decline in employment within the first four months of the year, seeing the unemployment rate rise further, said CIBC after Friday's Labour Force Survey (LFS).The 18,000 decline in jobs came against consensus expectations for a 10,000 increase and, combined with a slight uptick in participation, resulted in a rise in the unemployment rate to 6.9%, noted the bank.The unemployment rate increased most for young people aged 15-24, but also continued to drift higher for core-aged (25-54) workers. By sector, information, culture & recreation saw the largest decline in employment on the month, and by class of worker, the reduction was driven wholly by full-time, or 47,000 lower, and by public sector paid employment, down 10,000.Wage growth for permanent employees decelerated to 4.8% year over year, from 5.1% in the prior month, but remained higher than its 2025 average, pointed out CIBC.Statistics Canada noted that higher wage inflation so far this year has largely been due to compositional factors, such as a smaller proportion of workers with shorter job tenures.For the Bank of Canada, evidence that slack within the labor market is, if anything, increasing rather than reducing, should limit the ability for the oil price shock to spread into wider inflationary pressure, stated CIBC.The bank continues to see the BoC holding interest rates at their current level throughout 2026.

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