Expectations of a June interest rate cut solidify as cracks widen in labour market

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OTTAWA — Canada’s unemployment rate jumped to 6.1 per cent in March as more people looked for work and job growth stalled — solidifying expectations of a June interest rate cut.

Statistics Canada's labour force survey on Friday shows the jobless rate is up from 5.8 per cent in February, marking the largest monthly increase in the unemployment rate since summer 2022.

Investors will be looking for any hints from the central bank on when it plans to begin lowering its key rate, which currently sits at five per cent. Statistics Canada reported last week that real gross domestic product increased by 0.6 per cent in January. The agency added that it expected growth continued in February with a preliminary estimate pointing to a 0.4-per-cent gain.

Meanwhile, Canada's risein unemployment comes as high borrowing costs weigh on businesses and strong population growth continues to add to the country’s labour supply."The problem is that we got a slight decline in employment at a time when the population is still increasing, very, very quickly. And that was the main cause of concern within this report," Grantham later said in an interview.

 

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Expectations of a June interest rate cut solidify as cracks widen in labour marketCanada's unemployment rate jumped to 6.1 per cent in March as more people looked for work in an economy bogged down by high interest rates.
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