Canada: Employment growth expected to slow in November – BMO CM

According to Benjamin Reitzes, Canadian Rates & Macro Strategist at BMO Capital Markets, Canadian employment growth is expected to slow in November after a solid first ten months of the year.

Key Quotes

“We’re looking for a 10,000 increase in employment, about half the average increase over the past 20 years. After some wild volatility in the underlying details (e.g., the third biggest two-month percentage increase in fulltime/record drop in part-time), perhaps we’ll see a bit more stability. Retail/wholesale trade was hit hard in October, but some of that may have been due to Sears’ downfall, so we may not see a rebound. Also, construction was particularly solid in the prior month, pointing to some potential payback.”

“The jobless rate is expected to fall a tick to 6.2%, as labour force growth could reverse following a huge October increase. Indeed, the labour force has fallen in November in each of the past five years. We, along with the Bank of Canada, will be watching wage growth closely for any signs that the labour market is nearing full employment. Wage growth accelerated to 2.4% y/y in October, an 18-month high, but that’s still below the 3%+ the BoC would like to see, suggesting there remains some slack. Note that there’s no clear seasonality around this month’s print, beating/missing expectations exactly half the time over the past 10 years.”