The Canadian May employment report is due today at 1230GMT

The two 'headline' results …

Employment change

  • expected +23.5K, prior -1.1K

Unemployment rate:

  • expected 5.8%, prior 5.8%

Also:

  • 3.2% expected for hourly earnings (permanent), prior 3.3%

Preview via:

RBC:

  • We are forecasting a trend-like 15K gain in employment in May after a slight (1K) fall in April, with the unemployment rate expected to be steady at the multi-decade low of 5.8%.
  • The details in April were actually firmer than the headline would indicate, with full-time employment up 30K and wage growth continuing to print above 3% y/y (permanent workers at 3.3%).
  • A 7% hike in the Quebec minimum wage in May could see some continued firmness on in the latter.
  • Overall, the BoC's preferred wage-common measure - which favours earnings measures from other sources (SEPH, national accounts, productivity accounts) over the LFS - has shown some improvement of late (to 2.5% in Q1).

Scotiabank:

  • Friday's jobs report for May could post a headline improvement in the pace of job creation and perhaps further upward pressure upon wage growth.
  • Recall that the prior report for April was stronger in the details than the headline drop of 1,100 jobs indicated.
  • Excluding youths, jobs were up 21.4k in April as the youth category has been distorting the overall figure throughout the year. Youth employment fell by about 22k in April. Solid underlying momentum in the ex-youths category has been observed every month this year and it's unclear why the youth category has been this soft.
  • Wage growth is expected to rise somewhat, in part due to the fact that Quebec raised its minimum wage by 7% in May. BC will raise its minimum wage by over 11% in June, then Alberta's minimum wage goes up again in October and Ontario's increases again next January; so legislative changes could impact wage growth-and pass through to affected CPI categories like restaurants and home services-for quite some time yet.