Canadian labor market likely rebounded in August, jobless rate to have dropped to 5.6 pct

Canadian labor market data for the month of August is set to release tomorrow. According to a TD Economics research report, the labor market is expected to have rebounded in the month, with the creation of 15k jobs following the first back-to-back declines since the end of 2014.

The strength of job growth through fourth quarter/second quarter was unwarranted, but the six-month trend has already eased to 26k and would edge lower to 20k if the forecast is realized.

“We look for job growth to be led by the services sector and expect a partial rebound in private employment following a sharp contraction in July. Job growth of 15k should allow the unemployment rate to retrace lower to 5.6 percent while wage for permanent employees is edge higher to 4.7 percent y/y”, added TD Economics.