- Canada added 336.6K jobs in February, well above expected while measures of labour market slack were also bullish.
- The loonie saw immediate knee-jerk strength, dropping to the 1.2720s from above 1.2750.
The Canadian economy added 336,600 jobs in February, well above the median economist forecast for 160,000 jobs to have been added on the month, a report released by Statistics Canada on Friday showed. That marked a substantial improvement compared to January, when slightly more than 200,000 jobs were lost as a result of the rapid spread of the Omicron Covid-19 variant in Canada and associated lockdowns and public health restrictions at the time.
Measures of labour market slack made for even more bullish reading. The Unemployment Rate dropped a full percentage point to 5.5% from 6.5%, well below the expected 6.2%. Meanwhile, the Participation Rate jumped to 65.4% from 65.0% in January, well above the expected rise to 65.1%. So a big jump in the total size of the Canadian labour force and a bigger than expected drop in the proportion of those still out of work. The YoY rate of Average Hourly Wages growth rose to 3.3% in February versus 2.4% the month prior.
Market Reaction
The loonie has experienced immediate strength in the aftermath of the latest Canadian jobs figures. USD/CAD, which had been trading above 1.2750 prior to the release, has slumped into the 1.2720s and appears to be eyeing further near-term losses. Needless to say, the pair is at session lows and is eyeing a test of sub-1.2700 weekly lows.
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