Weak Payrolls Data Supports Estimate for Two 25bps Bank of Canada Rate Cuts in 2025, Says CIBC

09:31 AM EDT, 06/26/2025 (MT Newswires) -- Canada's "other" employment report continues to point to a weaker labor market than the more commonly followed Labour Force Survey (LFS), supporting the case for more interest rate cuts, said CIBC.

Statistics Canada's Survey of Employment, Payrolls and Hours (SEPH) on Thursday posted a 6,000 decline in April, following a revised 21,000 drop, which previously was 54,000, in the prior month. While trade-sensitive sectors such as manufacturing and transportation posted declines, lower employment was also recorded in sectors that should be less sensitive to United States trade, such as accommodation & food services, noted the bank.

Increases in employment within health, education and public administration partially offset the declines seen in other areas.

The report also highlighted a decline in job vacancies and the vacancy rate, while the number of unemployed persons per job opening rose to 3.1, up from 2.9 in March.

Despite the weakness in other indicators, fixed-weight hourly earnings accelerated to 4.7%, from 2.9%, although this series has been particularly volatile recently.

Overall, the weaker trend within this survey suggests that the labor market is softer than the LFS report does, and supports CIBC's forecast for two more 25bps cuts from the Bank of Canada before the end of the year.

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