“Poets are never unemployed, just unpaid” – Kathy Skaggs
TSX Rises on Strong Jobs Report
The Canadian economy added 27,700 jobs in May, per the Statistics Canada jobs report released this week. Stats Canada reported on Friday that the unemployment rate has fallen to 5.4%, down from 5.7% in April.
Canadian unemployment is now the lowest it has been since 1976, the year such data started being tracked and made available.
The May jobs numbers came on the heels of a record increase of jobs in April – where the Canadian economy added 106,500 jobs – and handily eclipsed analyst estimates of 8,000 jobs added.
Hourly wage growth also increased by 2.8% in May, up from 2.5% in April.
The S&P/TSX Composite closed Friday up 3.16 points (0.02%) at 16,230.96, within hailing distance of it’s all-time high watermark close (16,669.40) from April 23, 2019.
US Markets Update
Conversely to the strong Canadian jobs report, the US May jobs figures were softer than expected, with only 75,000 new jobs recorded, compared to estimates of 185,000 new jobs.
However, the market saw this jobs data as encouraging, betting on a Fed rate cut in July. The increased expectation of a rate cut propelled markets upward. The betting money has a July rate cut, followed by two additional cuts by year-end.
The US unemployment rate remained 3.6%, essentially holding steady compared to the April jobs report.
Fed rate cuts should boost US bond prices while also easing companies’ interest payments on revolving debt, and it appears that markets are already pricing these expectations in.
The NASDAQ jumped 126.55 points (1.66%) to close Friday at 7,742.10.
The Dow Jones Industrial Average increased by 263.28 (1.02%) to close Friday at 25,983.94.
The S&P 500 increased Friday by 29.85 points (1.05%) to settle at 2,873.34.
Sources: Statistics Canada, Advisor.ca, Globe Investor
This information is provided for general information purposes only. It does not constitute professional advice. Please contact a professional about your specific needs before taking any action.