Employment reports in Canada and in the US came in worst than expectations. According to analysts at the National Bank of Canada, the Canadian job market recovery was temporarily halted and strong economic growth will support hiring in the coming quarters.
Key Quotes:
“With a third wave of new COVID cases, Canada also witnessed a third wave of weakness in the labour market with a sizable employment decline in April. That said, most of these losses (-184K) can be attributed to the industries that have been the most negatively hit by public health measures since the start of the pandemic.”
“While significant restrictions are still in place in May (a rebound as soon as next month LFS is out of the cards), we expect a gradual easing in the coming weeks with the advance of vaccination, meaning that employment could rebound strongly during the summer.”
“We continue to think that the recent soft patch in the Canadian labour market should turn out to be transient as strong economic growth in the coming quarters will continue to support hiring. Recall that the Bank of Canada’s latest Business Outlook Survey shows hiring intentions being the most favourable in almost three years.”