"Just looking at this with some common sense, it does kind of suggest that the wildfires did have a negative impact on the month".
- Robert Kavcic, Bank of Montreal
Although there were growing concerns over the strength of the Canadian economy, mostly amid rather weak expectation results of April's data, the latest employment change figures surprised with their positive readings. As a result, these concerns should ease, as stronger employment data should diminish Bank of Canada's willingness to cut interest rates. A total of 13,800 new jobs were added in May, after having unexpectedly fallen to -2,100 in April, as reported by the Statistics Canada. According to expectations, the employment change was likely to rise only up to 1,800 during the previous month, but the upbeat data definitely brings more brightness in the overall Canadian economic activity.
Meanwhile, the strong jobs figures also sparked a decline in the unemployment rate, as it dropped to an almost one-year low in May, namely from 7.1% to 6.9%. Consequently, the so-called Loonie grew stronger with the release of the data, having risen up to 1.276 against the US Dollar. Meanwhile, being at 6.9%, the Canadian unemployment rate demonstrates the lowest figure since July 2015. The decline was influenced by a drop in the participation rate which slipped slightly to 65.7 from 65.8, but was mostly drive by strong growth in fulltime employment.
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