Canadian Jobs Preview: Forecasts from five major banks, extending recovery momentum

Statistics Canada is due to publish the August labor market report on Friday 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 North American economy is expected to witness a jobs growth of 100K in August as against a gain of 94K and 231K reported in July and June respectively. The Unemployment Rate is seen falling further to 7.3% in August vs. July’s 7.5%. 

A big blowout on the employment data is needed to rescue CAD bulls, according to FXStreet’s Dhwani Mehta.

TDS

“We look for the labour market recovery to slow with 50K jobs created in August, pulling the UE rate to 7.3%. Mobility indicators only saw minor improvement without any catalyst from relaxed social distancing measures. Details should prove slightly more upbeat; we expect full-time employment to lead job growth which should translate into a solid increase in total hours worked.”

RBC Economics

“We expect Canadian employment rose 100K in August, similar to the 94K gain in July with job growth benefiting from further easing in virus containment measures in parts of the country, including a move to Step 3 of Ontario’s reopening plan that didn’t start until late in the July survey reference period. What’s more, we forecast a drop in the unemployment rate to (a still elevated) 7.2%.”

NBF

“Hiring should have continued at a strong pace in the month, as the epidemiological situation allowed the economic re-opening to continue. Our call is for a 60K increase in employment, a gain that would allow the unemployment rate to decline three ticks to 7.2%, assuming the participation rate stayed unchanged at 65.2%.”

BBH

“Jobs data will be reported Friday, with a 66.8K gain expected vs. 94.0K in July and the unemployment rate expected to drop two ticks to 7.3%.  A strong jobs report could give Trudeau some tailwinds going into the elections.”

CIBC

“Friday’s job data should remain reasonably robust as the Delta variant upsurge in August was less dramatic than seen stateside and services activity was therefore less impacted. We forecast 50K new hires which would leave the Unemployment Rate at 7.3%.”