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New BoC Governor Poloz Assumes New Position In A Week Full Of Surprises

ByThe National Bank of Canada
Published 06/11/2013, 08:17 AM
Updated 05/14/2017, 06:45 AM

On Friday we learned that the Canadian economy created 95,000 new jobs last month, the best performance since August 2002. In the process, Canada’s unemployment rate fell slightly from 7.2% to 7.1%. Last week, Mr. Poloz, the newly apoointed Governor of the Bank of Canada affirmed that he does not foresee the bank lowering the key interest rate. The news helped the loonie appreciate over 1.5% on the week. Continued improvement in the Canadian economy could bring the loonie to parity with the U.S. dollar. According to the U.S. employment figures released on Friday, 176,000 jobs were created in May, which were 9,000 more than forecast. Finally, the unemployment rate rose from 7.5% to 7.6%.

Forecast
The Loonie
“It's not what you look at that matters, it's what you see.” Henry David Thoreau

As tradition has it, last Friday was the most widely anticipated day of the month. Market participants were at their screens at 8:30 a.m. for the release of Canadian and U.S. employment statistics for the previous month. The figure released in the U.S. was very close to the forecast (175,000 jobs created, vs. a forecast of 163,000), while many were surprised to see the number of Canadian jobs created: 95,000, or much more than the 15,000 that had been forecast. In fact, this was the best figure in 10 years. What was even more impressive was the quality of the jobs created.Of 95,000 new jobs, 75,000 were full-time. Of course this is very encouraging for the Canadian economy, but there is a danger in focusing too much on this kind of statistic without stepping back and seeing the bigger picture. The following graph shows monthly changes in Canadian employment data since 2002.

To Read the Entire Report Please Click on the pdf File Below.

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