With both the Labour Force Survey (LFS) and payrolls (SEPH) now pointing in the same direction, the Canadian jobs market outlook has become clearer, with conditions still subdued but showing signs of stabilization, according to Bank of Montreal Capital Markets (BMO) in a Thursday note.
Canadian payroll employment growth held steady in May, leaving payroll jobs around 110,000 higher than a year earlier, according to Statistics Canada SEPH data published Thursday.
Some divergence is normal given differences in methodology, including the exclusion of self-employed workers from payroll data and the potential for multiple-job holders to be counted more than once, added BMO.
"Bigger picture, we can get a clearer look at the labour market as the signals from both surveys are better in line," wrote BMO Senior Economist Shelly Kaushik in the note.
After large fluctuations in population growth, labor force growth is beginning to steady, and businesses are showing signs of moving beyond last year's trade-related uncertainty, added the bank.
However, the outlook remains vulnerable, especially with new US tariff risks emerging, according to BMO. The coming months will show whether stronger business confidence results in more hiring.