Statistics Canada reported that the Canadian unemployment rate remained steady at 6.7% in March, which was below market expectations for a stronger labor market performance [1]. The Net Change in Employment showed an increase of 14,100 jobs, reversing the significant decline of 83,900 jobs seen in February [1]. The participation rate was unchanged at 64.9%, and wage growth accelerated to a 5.1% annual pace, up from 4.2% in February [1].
TD Securities had forecasted a muted rebound in the Canadian labor market, expecting only 10,000 new jobs in March and an unemployment rate of 6.8% [2]. The bank cited elevated uncertainty and weak hiring intentions as factors likely to limit the recovery after February's large job losses [2]. TD Securities also projected wage growth for permanent workers to edge up to 4.3% year-over-year [2]. According to [1], actual wage growth was higher at 5.1%, indicating a stronger increase than TD Securities anticipated.
Market reaction to the jobs report was negative for the Canadian Dollar (CAD), with USD/CAD trading above the 1.3800 level and challenging its key 200-day simple moving average [1]. This suggests that investors viewed the labor market data as weaker than expected, despite the positive net job creation and rising wages [1].
TD Securities noted that mean reversion would typically support a larger rebound from February's job losses, but ongoing uncertainty and muted hiring intentions were expected to weigh on the recovery [2]. The bank anticipated muted job creation across both goods and services sectors [2].
CONCLUSION
Canada's labor market showed modest improvement in March, with job gains and steady unemployment, but the recovery was weaker than market expectations. The Canadian Dollar reacted negatively, reflecting investor concerns about the labor market's underlying softness and ongoing uncertainty.