Canada: Unemployment Rate rises to 5.4% in June vs. 5.3% expected

• Unemployment Rate in Canada rose to 5.4% in June.
• Net Change in Employment: 59,900 vs 20,000 expected. 
• USD/CAD drops toward 1.3300 after jobs reports. 

The data published by Statistics Canada revealed on Friday that the Unemployment Rate rose to 5.4% in June. This reading came in above the market expectation of 5.3%. The Participation Rate increased from 65.5% to 65.7%. 

Further details of the publication revealed that the Net Change in Employment was positive by 59,900, surpassing analysts' estimate of a 20,000 increase and follows a 17,300 decline in May. The annual wage inflation arrived at 3.9% in June. 

Key takeaways from the report: 

• The number of employees receiving pay or benefits from their employer—measured as "payroll employees" in the Survey of Employment, Payrolls and Hours—decreased by 25,100 (-0.1%) in April, excluding federal government public administration.
• Growth in payroll employment has moderated since the beginning of 2023. The decline in April followed cumulative increases of 48,900 (+0.3%) in February and March. In comparison, payroll employment in the previous five-month period generally trended upwards, with cumulative gains of 279,700 (+1.6%) from September 2022 to January 2023.
• Meanwhile, job vacancies edged down to 790,900 in April. Since January 2023, the overall number of job vacancies has fallen by 72,700 (-8.4%).
• On a month-over-month basis, average weekly earnings were little changed in April, following an increase of 1.0% in March. Monthly gains in April were recorded in construction (+3.9% to $1,514), educational services (+2.6% to $1,197) and transportation and warehousing (+1.9% to $1,252).

Market reaction: 

The USD/CAD tumbled from the 1.3360 area toward 1.3300 following the Canadian and the US labor market reports. Nonfarm payrolls in the US rose by 209,000 below expectations of a 225,000 increase.