Job Surge Causes Soaring Unemployment Rate, Adding Uncertainty to Bank of Canada's Interest Rate Decision

　　Canada (CAN) posted strong job growth in June, offsetting negative growth the previous month, but the unemployment rate climbed sharply. That complicates the Bank of Canada's interest rate decision next week.

　　The Labour Market Survey (LFS) released by Statistics Canada (CanStat) showed employment growth of 59,900 in June, well above the 20,000 expected by economists surveyed by Bloomberg. The unemployment rate, however, rose 0.2 percentage points to 5.4 percent, the highest level since February 2022.

　　The Canadian dollar rose against the U.S. dollar after the report was released, as data released at the same time showed official U.S. job growth fell short of expectations.

　　A string of strong economic data prompted the central bank to resume raising rates last month, and most institutions expect the Bank of Canada to have a nearly equal chance of holding rates steady or raising them again next week.

　　Dawn Dejardin, chief Canada economist at Deloitte, said: "I think it really justifies a June rate hike and it also justifies another rate hike next week."

　　Andrew Grantham, an economist at Canadian Imperial Bank of Commerce (CIBC), said: "Despite the big increase in overall employment, there was some slowdown in today's employment report, but this may not be enough to prevent the Bank of Canada from raising interest rates again next week."