Canada: Employment data not great but in line with BoC rate hike - CIBC

Analysts at CIBC, point out that today’s employment data from Canada showed positive but not great numbers; still strong enough for another rate hike from the Bank of Canada. 

Key Quotes: 

“The labour force survey has seen even more wild swings than normal since the start of the year, so a fairly unremarkable near-consensus 11K gain was itself a surprise. While a few years ago such a gain would have been considered trend-like, stronger population growth recently means that employment will have to rise faster on average to keep the unemployment rate steady over the longer-term.”

“The jobless rate only fell a tick in October, to 5.8%, because of a two-tick reduction in labour force participation.”

“Employment growth was only modest on the headline, but the details were fairly good in terms of the split between part/full-time and paid/self-employment. Full-time positions rose 34K, and are up by 173K (or 1.2%) on a year-over-year basis.”

“Today’s employment report was OK, but not in our view, good enough to tip the Bank of Canada into hiking interest rates again as early as December. However, given the more hawkish tone of Poloz and co. recently, good rather than great data will be all that’s needed for them to resume hiking interest rates in Q1.”

“While the employment report wasn’t that disappointing, it was released alongside some reasonably dismal trade figures. As a result, the C$ was weaker immediately after the data.”