According to Jinshi, Bank of America Merrill Lynch believes that Canada's wage growth slowed in April, making a rate cut in June still possible, even if the labor force report is strong. New jobs unexpectedly increased by 90,400, and the unemployment rate remained stable at 6.1%, while Bank of America Merrill Lynch expected 6.2%. The growth was mainly driven by part-time employment and the service industry.
The agency pointed out that the slowdown in hourly wage growth and the fact that core inflation continued to decline made a rate cut in July more likely and opened the door for the first rate cut in June. If the core inflation rate of the April CPI released on May 21 performs well, it is likely to clear the way for a rate cut in June.
