13.05.201820:58:00UTC+00Canadian Economy Suddenly Shed Jobs in April

The Canadian economy surprisingly shed jobs in April on the back of a decline in part-time positions, supporting wagers that the Bank of Canada will hold interest rates steady when its policymakers meet later this month.

The country lost 1,100 jobs in April, according to Statistics Canada. That's a sharp decline from the 32,300 rise posted in March and badly misses the 20,000 gain that analysts had forecast.

The job losses in April were concentrated mainly in the retail and construction trade, with weakness in those sectors counterbalancing gains in areas such as scientific and technical services as well as accommodation and food services.

The unemployment rate was unchanged at 5.8 per cent.

Nonetheless, economists said the details of the report were encouraging, with full-time jobs rising and an acceleration in wage growth supporting expectations of another rate hike in July.

The Loonie, which has been rallying the previous week on the back of higher oil prices, reversed a 0.3 percent gain to trade 0.1 percent lower against the dollar at C$1.2777 following the release of the report.

Markets imply a 68 percent likelihood that the central bank will hike in July, which would make for its fourth rate hike over the course of a year. While most economists expect the central bank to hold fire on May 30, markets are putting almost 40 percent odds on a hike this month, making for a sizable minority view.

While the Bank of Canada held rates steady last month, officials signalled in the accompanying statement that more rate rises are possible amid a pick-up in inflation and expectations the economy will rebound in the second quarter.

In a speech this month, Stephen Poloz, the bank's governor, also appeared more confident about the need for further monetary tightening, saying the economy is operating near full capacity.