Analysts at CIBC point out that the February Canadian employment report wasn't as dramatic as January’s surge, but a slightly above consensus employment gain is another sign that the Canadian economy has more momentum to start 2023 than had initially been expected.

Less drama, still solid momentum

“Although employment growth wasn't as dramatic this month as it has been in the recent past, the underlying trend remains stronger than what would normally be justified by the pace of GDP. Because of that, we still expect to see some softer employment figures and a gradual rise in the unemployment rate throughout the balance of this year, particularly as economic activity slows further with the lagged impact of past interest rate hikes.”

“For now the still historically low unemployment rate and strong wage growth will keep the Bank of Canada leaning towards future rate hikes, although we still don't think the data will be strong enough for policymakers to actually move again.”