Canada: Employment likely to rise by 25k in December – TDS

Analysts at TD Securities are looking for the labour market to recover a portion of the 71k jobs lost in November, with Canadian employment forecast to rise by 25k in December.

Key Quotes

“While outsized pullbacks in LFS employment are typically followed by meanreversion, there are few instances where Canadian employment has fallen by this magnitude outside of the financial crisis.”

“The goods-producing sector should provide the main engine behind the recovery after shedding 67.5k jobs over the last two months, including 2.9% of all manufacturing jobs, and some stabilization within auto production along with positive NAFTA developments should help bolster sentiment in the industry.”

“Services should see more modest job growth, and we do not anticipate any impact from CN workers returning from strike. A partial rebound in employment alongside a modest pickup in labour force growth should allow the unemployment rate to edge lower to 5.7%, while wage growth should slip to a still-robust 4.0% y/y from 4.4% in November.”