Canada: Employment to show a rebound in December, but small – CIBC

The Canadian employment report will be released next week. Analysts at CIBC explain that the consensus is looking for a big bounce-back in employment after November’s sharp drop, but there could be scope for disappointment. In November, employment dropped by 71K, consensus point to a rebound of 32K in December while CIBC forecast just 10K.

Key Quotes: 

“What goes down doesn’t always come back up again, at least not all the way. Following the sharp decline in employment during November, expectations are for a healthy rebound in December. However, the fairly broadbased nature of last month’s decline could mean less scope for a rebound. Moreover, following healthy readings earlier in the year, the annual pace of employment growth still looks a little better than would usually be expected given the modest gains in GDP.”

“A fairly modest increase in employment (at least in comparison with the prior month’s decline) would leave the unemployment rate unchanged at November’s 15-month high of 5.9%. Population growth has surged in the past year, but recent employment readings and the rise in the jobless rate suggest it is becoming harder to find jobs for all of those new workers.”

“While we don’t expect to see a further decline, a lackluster rebound would keep our rate cut call alive and likely support bonds and weigh on the C$.”