Canada Jobs Forecast: Big Five Banks Forecasts, Tense Labor Market

Canadian jobs data for May will be released by Statistics Canada on Friday June 9 at 12:30 GMT and as we get closer to release time, here are the forecasts from economists and researchers of five big banks in relation to the next employment figures.

The US economy is expected to have added 23,200 jobs after creating 41,400 jobs in April. The unemployment rate is expected to increase one point, to 5.1%. If so, it would be the first increase in the unemployment rate since August 2022. Meanwhile, the Participation Rate is expected to have held steady at 65.6%.

TDS

We expect job growth to slow to 25,000 in May, slowing from the recent trend of 57,000, and keeping the unemployment rate stable at 5.0%. We expect hiring in the services sector to drive the headline data, along with a rebound in full-time employment after the decline in April. We also expect wage growth to remain high at 5.1%, down 0.1 percentage points from last month.

RBC Economics

We expect employment in Canada to record another 20,000 job gain in May, after an increase of 250,000 between January and April. However, the unemployment rate is expected to continue to rise as the “excess” demand for labor continues to decline. Job postings are down nearly 20% from March peaks, consumer delinquencies have risen and job abandonment rates have slowed in recent months.

NBF

The labor market has been extraordinarily strong of late, with an increase of 344,000 jobs in the last six months. And while signs of a next reversal remain slim, we believe this pace is unsustainable over the medium term. So we expect more modest gains in the coming months, starting with a result of 20,000 in May. Despite this improvement, and assuming that the participation rate remains unchanged at 65.6%, the unemployment rate could still increase by one tenth to 5.1%, the result of another strong expansion of the labor force.

citi

We expect employment to remain stable in May, with the unemployment rate rising to a still low level of 5.2%. The moderation in employment could be partly due to the forest fires in May, which limited activity. Still, we expect some employment declines to be offset by continued strong immigration, with a higher participation rate. Hours worked will be a useful and more timely indication of the evolution of global activity than other activity data. We expect hourly wages for full-time employees to remain strong in May, up 5.1% year-on-year. Wages, and employment data in general, will continue to be an important factor to watch for risks of possible further rate hikes beyond June.

CIBC

Rapid population growth is creating a larger pool of potential workers, but cooling demand due to earlier interest rate hikes should cause employment gains to start to lag behind population growth. While the 20,000 jobs we forecast for May would have been considered strong, in 2023 they would be weak enough for the unemployment rate to climb to 5.1%.