July 10, 2020 / 1:14 PM / a month ago

Canada adds 952,900 jobs in June as COVID-19 restrictions ease

TORONTO (Reuters) - Canada added some 952,900 jobs in June, mostly in the services sector, Statistics Canada said on Friday. The jobless rate improved to 12.3% with the gains split between full-time work and part-time work.

STORY:

Market reaction: CAD/

LINK: here

MAZEN ISSA, SENIOR FX STRATEGIST, TD SECURITIES:

“The addition of (nearly) 1 million jobs, half attributed to full-time, was certainly encouraging and partly a function of partial reopening.”

The higher-than-expected unemployment numbers “while disappointing, largely reflects the increase in the participation rate. But at end of the day, it’s really what lies ahead.”

“Ultimately, the Bank of Canada is more preoccupied with downside risks. (But) we expect them to acknowledge we’re in the recovery phase.”

DEREK HOLT, VICE PRESIDENT OF CAPITAL MARKETS ECONOMICS AT SCOTIABANK:

“Very strong ... the underlying details tend to support it. Strong breadth across most of the categories, sectors, full-time, part-time split, so it’s a pretty robust report.”

“I think they (the Bank of Canada) will still be cautious about the aftermath of the initial V stage. This is reflecting a quick spurt as economies reopen. And so we saw that in Quebec in May and now we are seeing it in a more diversified fashion in the month of June.”

“The question is where do jobs go in the aftermath. We still have a lot of these so-called zombie workers working no hours, being supported by the wage subsidies.”

DOUG PORTER, CHIEF ECONOMIST AT BMO CAPITAL MARKETS:

“The key here is the jobs number. There are a lot of moving parts on the unemployment rate.”

“It’s a pleasant high-side surprise. In this day and age, every single number can have a massive range of error around it. It’s a big step in the right direction.”

“In terms of policy, it doesn’t have any direct impact (on central bank policy). There’s no hint the (central) bank is even thinking about reversing course. From a bigger picture, this does play to the relative optimists who thought the economy would snap back in the late summer. It does suggest that at least the early recovery was somewhat V shaped.”

“The economy had quite a solid June. These data only take us to the middle of June, so I expect July’s jobs numbers will post another solid gain.”

Reporting Steve Scherer, Fergal Smith and Nichola Saminather; Editing by Denny Thomas

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