Canada's Job Surprise: Unemployment Drops Amid Economic Uncertainty

Canada's unemployment rate fell to 6.9% in June as the economy added 83,100 jobs, defying expectations of a rise to 7.1%. This change is influenced by increases in wholesale, retail trade, and healthcare sectors. The data could impact the central bank's policy decisions. The Canadian dollar and bond yields reacted to the news.

Canada's unemployment rate unexpectedly decreased to 6.9% in June, a surprising development attributed to the creation of 83,100 new jobs, primarily in wholesale, retail trade, and healthcare sectors. The figures mark the first net increase in employment since January, according to Statistics Canada.

Despite analysts predicting an uptick in unemployment to 7.1% with no job additions, the labor report shows a notable deviation. The central bank may lean towards maintaining its policy rate following the positive job numbers just ahead of its upcoming monetary policy meeting on July 30.

The unemployment figures came amid looming geopolitical tensions, notably U.S. President Trump's tariff threats. Money market predictions for a rate cut have diminished significantly. Meanwhile, the average hourly wage of permanent employees increased, a key metric for inflation forecast.

(With inputs from agencies.)