- The rate of unemployment in Canada rose 6.9% in April.
- USD/CAD trading is marginally below the day near 1.3900.
The unemployment rate in Canada rose higher than 6.9% in April from 6.7% in March, Statistics Canada reported Friday. This reading came above the market relying of 6.8%.
During this time, the net change in work reached 7.4K, a noticeable improvement from the collapse of 32.6K recorded in March. Other details of the report showed that the participation rate was tched up to 65.3% from 65.2%, while the average time -a -day wage increased by 3.5% on the annual basis, which corresponds to the increase of March.
Market reaction
The USD/CAD did not show an immediate market reaction to these figures and last saw the trade marginally less than the day at 1.3905.
FAQs at work
Labor market conditions are a key element to assess the health of an economy and thus a major driver for money appreciation. High work, or low unemployment, has a positive implications for consumer spending and thus economic growth, boosting the value of local currency. Moreover, a tight labor market – a situation where there is a lack of workers to fill open positions – may also have implications for inflation levels and thus financial policy as low labor supply and high demand leads to higher wages.
The speed of which the salary grows in an economy is key for policy manufacturers. High wage growth means that households have more money to spend, usually leading to rising prices on consumer goods. In contrast to more inflation sources such as energy prices, wage growth is seen as a major component of the underlying and ongoing inflation as pay increases are unlikely to be eliminated. Middle banks around the world pay attention to wage growth data when deciding on financial policy.
The weight assigned by each central bank to the conditions of the labor market depends on its goals. Some central banks clearly have mandates related to the labor market beyond control of inflation levels. The US Federal Reserve (FED), for example, has two mandates for promoting maximum work and stable prices. Meanwhile, the single order of the European Central Bank (ECB) is to maintain inflation control. However, and despite any commands they have, the conditions in the labor market are an important factor for policy manufacturers that have been given as a significance of economic health and their direct contact with inflation.
