Scotiabank: Canada's Labor Market Weakens; Central Bank Expected to Maintain Pause on Rate Cuts

According to Scotiabank report cited by Jin10 on June 3, Canada's labor market shows weakness as May employment is expected to rise modestly by 10,000, with unemployment holding at 6.9%. The bank noted that in the first four months of 2026, Canada shed over 100,000 net jobs across three months and entered a technical recession, with first-quarter GDP contracting 0.1% on a seasonally adjusted annualized basis.

Despite the slowdown, Scotiabank expects the Bank of Canada to maintain an accommodative stance, citing persistent weak employment data alongside trade policy uncertainty and geopolitical risks. The central bank is widely expected to hold its overnight rate steady through at least several upcoming policy meetings.