Canada’s jobs grew by 39,800 in May, economic data released on Friday showed expectations. Analysts at CIBC believe the latest economic data means the Bank of Canada may hike interest rates slightly higher.

Important Quote:

“Another solid growth in employment, a fall in the unemployment rate and a sharp uptick in wage growth in May put pressure on the Bank of Canada to continue aggressively raising interest rates. The workforce grew by 40,000, a 27.5 percent increase by consensus. k, which was enough to push the unemployment rate to a new record low of 5.1%. Now that wage growth is also accelerating, the Bank of Canada is pushing interest rates toward the midpoint of their neutral range. Will feel an increase in pressure for (2-3%) ) and maybe even more.

“Continuing solid economic momentum, combined with signs that inflation pressures are increasing rather than easing, means the Bank of Canada may raise interest rates slightly higher than previously expected. We are now at 2.75% (previously 2.5%). ) before the end of the year, although we still expect growth and inflation to slow enough later in the year to prevent banks from raising rates above the 3% upper limit of their neutral rate range could.”