The S&P/TSX Composite Index dipped on Friday following the latest Canadian jobs report that showed the labour market tightened in June, providing more support for Bank of Canada interest rate hikes.

Canada’s main stock index closed down 40.31 points at 19,022.86. Suncor Energy Inc., First Quantum Minerals Ltd. and Canadian Natural Resources Ltd. were the biggest drags on the TSX.

Shares of Rogers Communications Inc. closed in the red by 1.17 per cent Friday after the company scrambled to fix a widespread network outage which left many customers and businesses without mobile and internet services.

The service blackout caused problems for retailers trying to accept debit payments. 911 services and Service Canada passport offices were also disrupted.

Markets in New York were mixed at the end of the trading week. The S&P 500 fell 0.08 per cent, the Dow Jones Industrial Average was down 0.15 per cent while the Nasdaq gained 0.12 per cent. 

Canada’s unemployment rate plunged to a record low of 4.9 per cent in June as many Canadians dropped out of the workforce.

This marks the fourth consecutive month that Canada’s unemployment rate hit a record low.

Statistics Canada reported the economy lost 43,200 jobs in the month, in contrast to the 22,500 gain anticipated by economists.

“I do think there's a note of caution that needs to be sounded here when we look at Canadian labour data, which is that it tends to be a very volatile series month-to-month,” said Andrew Kelvin, chief Canada strategist at TD Securities, in an interview Friday.

When comparing Canada’s record low employment rate to the United States’ better-than-expected 372,000 jobs gain in June, Kelvin said investors need to consider that Canada “had quite a quick recovery in the participation rate following the pandemic, unlike the U.S., where the labour force took a long time to recover” back to pre-pandemic levels.

“I think if you look at the overarching narratives around the two economies, I do think more people are looking at the U.S. as being at risk of recession in the near term,” Kelvin said.

“When I'm looking for potential inflection points in the economy, I'm much more concerned with the U.S. jobs number just given that the U.S. is further along in their sort of post-pandemic phase.”

ALL EYES ON BANK OF CANADA

Investors will be paying close attention to the Bank of Canada’s next interest rate decision on Wednesday, with economists expecting the central bank to follow the U.S. Federal Reserve’s lead and raise its key interest rate by three-quarters of a percentage point.

Earlier this week, the Canadian central bank released its quarterly survey of executives and consumers, which showed the price pressures that have pushed inflation to a four-decade high are likely to continue for longer than previously expected.

But a recent study by the Canadian Centre for Policy Alternatives said the Bank of Canada’s strategy of rapidly hiking rates in order to get a handle on inflation could push the country into a recession.

Lauren Goodwin, portfolio strategist at New York Life Investments, said the bank might not have much choice in continuing to raise rates amid strong wage growth and housing prices.

But despite “hawkish signals all around,” Goodwin said long-term investors can still benefit from this volatile investing environment.

“The number one thing to keep in mind for investors, especially those thinking in the medium-and long-term, is to stay invested,” Goodwin said in an interview Friday.

She said recession-proof strategies from the last cycle aren't likely to work this time, as inflation eats away at asset classes like cash, treasuries and high-grade bonds.

“Instead, we're looking at the asset classes that can build some resilience against recession risk but also take the inflation side of the picture into mind. So asset classes that have cash flows linked to inflation like infrastructure, equity and bonds, for example, real estate. As well as those that can help buffer against this hawkish message we’re seeing from central banks, floating-rate bonds are an example,” Goodwin said.

Benchmark WTI crude closed up US$2.06 at US$104.79 a barrel. 

Oil prices have swung by a range of more than US$16 this week amid demand concerns and signals of tightening global supply.

The Canadian dollar finished at 77.19 cents U.S., up 0.013 of a cent.