Canadian Jobs Preview: Forecasts from five major banks, some hiring softness ahead

Statistics Canada will publish the Canadian September labour market data at 12:30 GMT and as we get closer to the release time, here are the forecasts of economists and researchers of five major banks regarding the upcoming employment data. The Unemployment Rate in Canada is expected to remain unchanged at 6.9% in October with the Net Change in Employment coming in at +19.3K.

TDS

“In Canada, job growth should slow significantly after September's surge; we look for a 35K print to push UE to 6.8%, with an unwind of election hiring weighing on the headline print.”

RBC Economics

“We expect Canadian employment increased by 50K in October with the unemployment rate ticking down to 6.8% from 6.9% in September. Strong demand for workers as indicated by widely reported labour shortages and the high level of job postings means that part of that shift will have been from unemployment to job growth in October. Another increase would take employment further above pre-pandemic levels and extend the outperformance of labour market data relative to economic output (GDP) in recent months.”

NBF

“Although we believe that the labour market situation continued to improve during the month, supported by the amelioration of the epidemiological situation and the gradual withdrawal of government income support programs, we still expect a 10K decrease in employment. Far from being the start of a downtrend, this decline would in fact represent only a normalization after September’s breathtaking figure. Assuming the participation rate stayed unchanged at 65.5%, this small decline should leave the unemployment rate unchanged at 6.9%. The recovery in employment is expected to resume in November.”

CIBC

“Job growth has been so brisk relative to GDP gains that we’re overdue for some hiring softness ahead (+20K), but we’re still looking for only a marginal uptick in the unemployment rate to 7.0% in Friday’s report. If employment fails to keep up with population growth as we expect, the unemployment rate would tick up slightly. That would have investors scaling back expectations for early BoC hikes, weighing on the CAD and supporting fixed income.”

Citibank

“Net Change in Employment (Oct) (Citi: 60K, prior: 157.1K); Unemployment Rate (Citi: 6.7%, prior: 6.9%); Hourly Wage Rate Permanent Employees (Citi: 2.1%, prior: 1.7%). Employment in many sectors have returned to pre-COVID-19 levels, and further upside is much more uncertain and potentially limited by labour supply issues.”