Canadian Jobs Preview: Forecasts from five major banks, extending recovery yet uncertainty looms

Statistics Canada will publish the Canadian September labour market data at 12:30 GMT. Canada is set to report a healthy increase of 60,000 jobs in post-pandemic growth after printing 90,200 in August. Here you can find the forecasts of economists and researchers of five major banks regarding the upcoming employment data. 

In the view of FXStreet’s Analyst Yohay Elam, the upcoming employment figures from Canada could be an opportunity to trade USD/CAD.

TDS

“We look for job growth to slow to 55K, pulling UE 0.2pp lower to 6.9% and leaving total employment ~100K below pre-COVID levels. Services will drive the headline print, helped by restaurants and a slight tailwind from the federal election. Full-time workers should lead job creation, translating to a solid increase for total hours.”

RBC Economics

“We expect a 50K increase in headline employment in Canada, with the unemployment rate edging down to 6.8% from 7.1% in August. We expect that September job gain in Canada would still leave a sizeable (~100K) shortfall in jobs versus pre-pandemic levels. And while job vacancies are high, the concern now will be matching those unemployed workers to new positions, particularly as expanded income support programs begin to wind down. Signs of substantial pressure to lift wages have yet to emerge, but will if widespread reports of labour shortages persist.” 

NBF

“Our call is for 40K increase in employment, a gain that would allow the unemployment rate to decline two ticks to 6.9%, assuming the participation rate stayed unchanged at 65.1%.”

CIBC

“Back to school likely meant back to work for many Canadian parents. With institutions across the country returning to in person learning this September, more parents were probably able to join the workforce. The reintroduction of in-class education also likely meant more support workers were needed at those places. But the return of school isn’t the only reason we’re forecasting another solid gain in employment of 70K.”

Citibank

“We expect employment to rise by a slower pace (65K) than seen in the last few months as the bulk of the reopening-related hiring has likely already occurred. Nevertheless, employment reports over the coming months should still show a climb back towards pre-COVID levels. We expect labor shortages to result in some stronger wage gains over coming months, that should convince BoC of an earlier-closing of the output gap.”