Instant View: Canada May job gains biggest in 11 years

TORONTO Fri Jun 7, 2013 9:19am EDT

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TORONTO (Reuters) - Canada's economy created a whopping 95,000 new jobs in May, the biggest monthly gain in 11 years, and most were full-time positions and in the private sector, Statistics Canada said on Friday in a report showing the economy may be gaining momentum.

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COMMENTARY

CAMILLA SUTTON, CHIEF CURRENCY STRATEGIST AT SCOTIA BANK IN TORONTO

"Obviously, the numbers were much, much higher than expected with significant job gains in the month of May in Canada. This erases some of the fears in the market that Canada was wildly underperforming the U.S. and the domestic economy was very weak. So having such a strong print does remove some of those fears."

"We got an as is jobs report from the U.S., typically the U.S. report would have overshadowed the Canadian one, but an as expected report from the U.S. let the Canadian dollar rally significantly on the back of much stronger Canadian numbers."

"The Bank of Canada right now has a very slight hawkish tone to their statement and yesterday's commentary by Poloz was very much in line with what Carney had already said, so I think for now it is very much Bank of Canada on hold. I don't think it's enough to shift that stance."

DOUG PORTER, CHIEF ECONOMIST AT BMO CAPITAL MARKETS

"Suffice to say, this comes as a surprise. I think that's probably one of the understatements of the year. This is one of the largest monthly increases in employment on record. Clearly it just blows away the soft patch for Canadian employment in the first fourth months of the year. One thing I would point out ... if you take the last three months in combination, it's not really that out of the ordinary. But it really does change the picture for the job market. Instead of being mired in a prolonged period of weakness, it looks like the underlying trend in employment is still chugging along quite nicely."

"The Bank (of Canada) always takes any single month with a grain of salt. At the margin, it slightly increases the chances of the bank tightening at some point over the next year. There's certainly not going to respond to one employment number. It does put a rosier hue on the Canadian economic outlook at this point."

"It's tough to imagine a better combination for the Canadian dollar. You've got a U.S. economy that's still growing relatively healthily, not as well as everybody would hope for, but a decent U.S. number and a spectacular Canadian number. It really doesn't get any better than that for the Canadian dollar."

(Reporting by Solarina Ho, Euan Rocha and Peter Henderson; Editing by Jeffrey Hodgson)

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