Bank of Canada and the markets likely to look beyond today's jobs data

There were few major surprises in Canada's jobs data in April, which is a bit unfortunate in this case. Canadian employment fell by 19,700 in April following the 28,700 gain the prior month, with the Target layoffs apparently weighing in heavily. Consensus was looking for at least a small setback, given some expected pullback from March's good gain and from Target's closure in this report --- in fact, employment in retail & wholesale trade fell 20,500, not far from the estimated 17,500 job loss at the retail chain.

The details of the play were not bad ... full-time jobs were up 46,900, the unemployment rate held steady at 6.8% (as the part rate dipped yet again to match its Q1 average), and total hours worked rose a decent 0.3%. Private sector payrolls rose 24,200, offsetting declines in public sector jobs and self-employment. Finally, wages are showing some spark, with average hourly wages up 2.3% y/y versus 2.0% the prior month.

"We had expected a weak report with the 1-2 punch of the Target layoffs and some payback from March's artificial strength. Beyond the headline hits, the underlying story is a bit better, with full-time jobs and hours worked up, wages improving, and even factory employment lifting from the lows. Because the April weakness was so specific to a one-time factor, the Bank of Canada and the markets are likely to look beyond this result, and expect better days ahead. With the respectable bounce in U.S. jobs today, that seems like a reasonable call." said BMO Capital Markets