Market News: Week Ending May 8, 2026

Market News: Week Ending May 8, 2026

Statistics Canada announced that, in March, Canada's merchandise exports rose 8.5% and imports fell 1.6%. As a result, Canada's merchandise trade balance with the world swung to a surplus of $1.8 billion from a revised deficit of $5.1 billion in February (originally reported as a $5.7 billion deficit). This was the first surplus since September 2025 as energy exports surged 15.6% to their highest level since September 2022. StatsCan simultaneously released the services trade results and a deficit of $0.1 billion was recorded in March. It is widely expected that trade figures will continue to fluctuate as international trade remains unsettled. The combined, total trade surplus and downward revisions be a positive sign for overall GDP growth in the first quarter. 

The U.S. Census Bureau announced that the country's international trade deficit in goods and services stood at $60.3 billion in March, wider than the revised $57.8 billion gap now reported for February (previously reported as $57.3 billion). March exports were $320.9 billion, $6.2 billion more than February exports. March imports were $381.2 billion, $8.7 billion more than February imports. A larger trade deficit was anticipated, and the posted figure is in line with market expectations. 

The Institute for Supply Management announced that its Non-Manufacturing (Services) PMI edged lower to 53.6 in April, from March’s 54.0 level. Regardless, the April reading is the 22nd consecutive above the key 50.0 (generally expanding) level for the services sector. With the market looking for a small decline, this report is broadly in line with consensus expectations. This result indicates signs of further expansion of the service sector, but at a slower pace. 

The U.S. Bureau of Labor Statistics announced that non-farm labour productivity expanded by 0.8% (annualized) during the first quarter of 2026, establishing another new high. This follows a 1.6% advance (on the same basis) in the final quarter of 2025. During the first quarter of 2026, unit labour costs rose 2.3% (annualized). These results are somewhat weaker than market expectations, but they paint a stark picture when compared to Canada’s extended decline in productivity (productivity remains 9.1% below the 2020 high). Productivity growth is important for longer-term economic stability as it reflects a country’s competitiveness, allows for higher wages, faster economic growth without inflationary pressures, and a higher standard of living.

The U.S. Department of Labor announced that initial jobless claims totalled 200,000 (seasonally adjusted) in the week ending May 2, an increase of 10,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 189,000 to 190,000. The 4-week moving average was 203,250, a decrease of 4,500 from the previous week's revised average. The previous week's average was revised up by 250 from 207,500 to 207,750. These results are in line with market estimates.

Statistics Canada announced that overall employment fell by 17,700 in April. In line with the monthly move, thus far in 2026 total job losses now stand at 112,300. The April results left the overall annual rate of job growth at a negligible 0.3%. At the same time, the overall unemployment rate rose from 6.7% in March to 6.9% in this report, as the labour force reported a modest improvement (33,500). Another increase in the population (8,900) left the participation rate (the percentage of working age individuals who were either working or looking for work) at 65.0%, far below the pre-pandemic peak of 67.3%. This indicates that as the population has surged, there are now 790,000 potential workers still on the sidelines compared to 95,000 at the end of 2010. A return to 67.3% participation would produce a more realistic unemployment rate of 10.1% - consistent with a recession. The headline results were weaker than market expectations and the soft job market will again raise questions regarding the likelihood of a monetary policy adjustment by the Bank of Canada at their next interest rate announcement, scheduled for June 10.

The U.S. Bureau of Labor Statistics announced that the unemployment rate was unchanged to 4.3% in April. At the same time, gains in non-farm payrolls were reported as 115,000 during the month, adding to the revised 185,000 gain recorded for March (originally reported as 178,000). During April, average hourly earnings climbed 0.2% to stand with a year-over-year advance of 3.6%; above headline inflation (3.3% in March). This report was stronger than consensus estimates and will prompt further market debate on the future direction of Fed policy given the current ‘on hold’ position. The next meeting is scheduled for June 16 and 17. This is the most closely followed set of U.S. statistics as it indicates the relative health of the various sectors of the economy and is suggestive of consumer spending.

Regards,

Glenn

 

Note:
All index performance is in Canadian dollars.

IMPORTANT DISCLAIMERS
The information in this letter is derived from various sources, including CI Global Asset Management, CRA, Bloomberg, National Post, Globe and Mail, Wall Street Journal, Bloomberg, Reuters, Investment Executive, Advisor.ca, MarketWatch, Toronto Sun, The Guardian, MSN.ca and Statistics Canada at various dates. This material is provided for general information and is subject to change without notice. Before acting on any of the above, please contact me for individual financial advice based on your personal circumstances. Certain statements contained in this communication are based in whole or in part on information provided by third parties and CI Global Asset Management has taken reasonable steps to ensure their accuracy. Market conditions may change which may impact the information contained in this document.