Canada added 90.4K jobs in today's labour force survey, crushing expectations of an 18.0K gain. However CIBC says the gain is less-impressive than it seems because population growth added 107K people to the labour force in the month.
With that, they continue to see the Bank of Canada cutting rates in June.
While today's increase in employment was much better than expected, this strength appears to largely reflect a further surge in the base population as the labour force count catches up with the quarterly population tally. With the unemployment rate remaining higher than it was at the start of the year and wage pressures easing slightly, the data is still consistent with a gradual loosening of labour market conditions. We continue to forecast a first interest rate cut at the next meeting in June, although after today's data that call relies even more heavily on core measures of inflation remaining subdued within the next CPI print.
