Canadian Jobs Preview: Forecasts from five major banks, quite tepid jobs gain in October

Canada’s employment data for October will be reported by Statistics Canada on Friday, November 4 at 12:30 GMT and as we get closer to the release time, here are forecasts from economists and researchers at five major banks regarding the upcoming jobs figures. 

The North American economy is estimated to have created 10K jobs in October as against a massive jobs growth of 21.1K reported in September. The Unemployment Rate, however, is seen higher at 5.3% last month from September’s 5.2% while the Participation Rate is likely to hold steady at 64.7% in the reported period.

TDS

“We look for employment to rise by 10K, fueled by the goods sector, which should see the UE rate edge higher to 5.3% as wage growth slips 0.1pp lower to 5.1% YoY.”

NBF

“Recent economic indicators point to a slowdown in growth in Canada, a phenomenon that could be reflected in employment data. Layoffs may well have remained low during the month, but we believe this could have been offset by a slowdown in hiring amid declining small business confidence. Our call is for a 5K increase. Despite this gain, the unemployment rate may increase from 5.2% to 5.4%, assuming the participation rate rose one tick to 64.8% and the working-age population grew at a strong pace.”

RBC Economics

“We expect a 5K increase in Canadian employment in October, as hiring momentum (especially on the goods-producing side of the economy) continues to soften amid a cooling housing market and weakening demand for consumer products. That, together with a small rebound in the labour force participation rate, should drive the jobless rate back to August levels of 5.4%.”

CIBC

“We expect to see only a very slim 5K increase in employment during October, which would be far enough below the pace of population growth to see the jobless rate tick up to 5.3%. Monthly movements in average wages have been softer in recent months, although the annual rate is expected to remain close to 5% in October before easing more meaningfully next spring. A further, modest, rise in the unemployment rate combined with additional evidence that wage inflation is close to peaking should convince the Bank of Canada to slow and eventually halt its current rate hiking cycle.”

Citibank

“Canada Net Change in Employment – Citi: 15K, prior: 21.1K; Unemployment Rate – Citi: 5.3%, prior: 5.2%; Hourly Wage Rate – Citi: 5.0%, prior: 5.2%. Monthly trends in job growth appear to have returned towards a more typical pre-pandemic pattern. An even more notable slowing in activity around mid-2023 should see more consistent monthly jobs losses and a rise in unemployment.”