B.C. led the country in job gains in June, adding 15,400 positions in a month that left analysts with more positive data that expected.
Economists were forecasting Canada would lose 10,000 jobs last month. Instead, the nation posted losses of 6,500 jobs while the unemployment rate remained unchanged at 6.8%.
“The June jobs report could have been much worse,” TD economist Brian DePratto wrote in an investors’ note.
“While the headline number is negative, the details of the report were largely positive, as full-time employment rose markedly on the month, pushing up the number of hours worked.”
In B.C., the unemployment fell from 6.1% in May to 5.8% in June.
While the province lost about 21,000 part-time jobs, it more than made up for that by gaining more than 36,000 jobs.
BMO chief economist Douglas Porter said in a note to investors B.C.’s strong performance is in line with its role as one of Canada’s “growth leaders” along with Ontario.
Porter said the better-than-expected job numbers now make it a “toss-up” as to whether the Bank of Canada (BoC) cuts its overnight rate next week from 0.75% to 0.5%.
The BoC’s target rate influences consumer loans, mortgages and the value of the loonie.
Economists have been forecasting the BoC would cut the rate on July 15 to lower the Canadian dollar and spark exports in an effort to boost the economy following the oil price correction that began late last year.
In January, the BoC surprised analysts and cut the overnight rate for the first time in four years to buffer against the oil price correction.
DePratto, along with economists at CIBC and RBC, said the recent jobs data indicates a rate cut is likely next week.
“This (employment data) does not change our view that (GDP) growth is likely to have contracted by between 0.5% and 1.0% in the second quarter, and is significantly underperforming the Bank's forecast detailed in April,” DePratto wrote.
