How rate cut bets are changing after April jobs ‘shocker’

globalnews.ca:

A surprisingly strong April jobs report is likely to “raise eyebrows” at the Bank of Canada, with economists and markets split on when interest rate cuts could begin.

The national unemployment rate was unchanged at 6.1 per cent in April as Canadian employers added some 90,000 jobs, Statistics Canada reported Friday.

The Labour Force Survey shows employment gains were concentrated in part-time work and in the private sector, both accounting for roughly 50,000 new positions.

The professional, scientific and technical services and food and accommodation sectors drove job gains last month, in addition to health care and social assistance and natural resources industries.

Despite a gain of 40,000 jobs in the month, youth aged 15-24 in particular are seeing unemployment rise at faster rates than other demographics, StatCan noted. The jobless rate for youth was up 2.9 percentage points year-over-year to 12.8 per cent in April, marking the highest unemployment rate for this demographic since July 2016, outside the COVID-19 pandemic.

Dawn Desjardins, chief economist at Deloitte Canada, tells Global News that it’s concerning to see a jump in unemployment for the youngest working age group, which is meant to build the foundation of the country’s future workforce. She says a high unemployment rate among youth is particularly concerning heading into the summer job season, when students are typically hunting for work.

“When we think about … youth trying to get their foot in the door of the labor market, it’s disturbing,” Desjardins says.

CIBC executive director of economics Andrew Grantham said in a note to clients Friday morning that the April jobs report “easily beat” economists’ expectations.

The April report marks a reversal from