Canadian employment likely to have dropped in November

Canadian employment report for the month of November is set to release tomorrow. According to a TD Economics research report, the labor market is expected to underwhelm with a 10,000 decline in employment for November, driven by an unwind of election-related hiring after public administration employment rose by 20k in October.

Financial sector employment, at present running at +5.5 percent year-on-year, also looks prime for some giveback after a 17k rise last month while unseasonably cool weather will be a drag on construction hiring. Meanwhile, manufacturing employment is likely to have recovered from a 23k drop after the resolved UAW strike allowed Canadian workers to return to the job, however, this could be partially countered by the scheduled window of GM’s Oshawa plant.

“Should our forecast prove accurate the 6m trend would slip from 22k to 16k, the softest pace since mid-2018, with declines in four of those six months. This would push the unemployment rate back to 5.6 percent, assuming modest labour force growth, while muted base-effects should see wage growth hold at 4.4 percent y/y”, added TD Economics.