Canada’s economy lost 43,200 jobs in June, missing expectations for a 23,500 gain, according to Statistics Canada data.
But the unemployment rate fell to a new record low of 4.9% as fewer Canadians looked for work, and the average hourly wage rose 5.2% year over year, from 3.9% in May.
The wage jump “will only add to concerns from the Bank of Canada, which fears high inflation rates will not fall sufficiently without further aggressive rate hikes,” said Nathan Janzen, economist and deputy head of RBC Economics, in a bond.
Money markets have fully priced in a three-quarters-point rate hike by the Bank of Canada next Wednesday, which would be the largest hike in 24 years.
Meanwhile, stronger-than-expected US jobs data fueled expectations of another big rate hike by the Federal Reserve later this month.
Oil prices, one of Canada’s top exports, recouped part of this week’s decline, which was fueled by concerns over a possible recession, which outweighed tighter global supply.
US crude rose 1.8% to $104.60 a barrel, while the Canadian dollar traded 0.2% to 1.2941 for the greenback, or 77.27 US cents.
The currency has been trading in a range of 1.2940 to 1.3034. For the week, it was on track for a 0.5% decline.
Canadian government bond yields rose along the curve, following the performance of US Treasuries. The 10-year yield hit its highest level since June 30 at 3.306%, before falling slightly to 3.289%, up 7.1 basis points on the day.
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