REFILE-INSTANT VIEW-Canada unemployment rises to 7% in May

TORONTO, June 6 - Canada's unemployment rate in May rose to its highest level in almost nine years at 7%, up from 6.9% in April, data showed on Friday.

Canada added 8,800 jobs in the month.

Market reaction: CAD/

Link: https://www150.statcan.gc.ca/n1/daily-quotidien/250606/dq250606a-eng.htm?HPA=1

COMMENTARY

DOUG PORTER, CHIEF ECONOMIST, BMO CAPITAL MARKETS

"The numbers are a little better than I would have expected, it is really not a shock. I mean on the surface it seems like a stable situation. What was encouraging was the fairly large growth in full-time jobs in the month. So this is not to say that the coast is clear by any means, we still had yet another 12,000 job losses in manufacturing, so it certainly is not a strong report. But it does show gains in other areas in the economy is enough to offset the underlying weakness we are seeing in trade sectors like manufacturing."

DEREK HOLT, VICE PRESIDENT OF CAPITAL MARKETS ECONOMICS, SCOTIABANK

"Not too shabby, it's hanging together pretty well in Canada, especially if we take out the public administration component."

"I was expecting a negative headline, mostly driven by the public admin (administration) ex-election effect. That was in there, we did see that expected effect but the rest of the job market was much stronger than what I had expected."

"For the Bank of Canada, I think they'll take this as a sign of relief."

ANDREW GRANTHAM, SENIOR ECONOMIST, CIBC CAPITAL MARKETS

"While today's data were not quite as bad as expected, there's still signs of slack gradually building in the labour market which supports our call for a return to interest rate cuts at that July meeting, albeit admittedly with a lot more data and tariff news still to come before that decision."