The Canadian employment report released on Friday showed weaker-than-expected numbers, with an unexpected decline in net employment. Analysts at CIBC point out the weak headline figures may have the Bank of Canada questioning its apparent commitment to even higher interest rates but they noted numbers could rebound in the months ahead due to education employment.
Key Quotes:
“Summer lulling continued in the Canadian labour market, with a 40K drop in jobs marking the third consecutive monthly decline. However, unlike the prior two months, the latest drop can't be easily brushed aside as a consequence of reduced labour supply. Indeed, the participation rate actually edged up in August, meaning that the decline in employment took the jobless rate up to 5.4%, from 4.9% in the prior month. Yet with the decline in employment partly a result of a large drop in education, which often sees volatility in summer months, we doubt that today's weak headline numbers will change the Bank of Canada's commitment towards raising interest rates further.”
“The decline in jobs during August was focussed on full-time (-77k) and public sector (-28k) positions. By sector, a 28K drop in construction jobs (a sector previously booming) shows that interest rate hikes are having an impact on the labour market. However, the near 50K decline in education employment is more likely to represent difficulties in seasonal adjustments within this sector, and as a result we should see a rebound in the months ahead.”
“The weak headline figures may have the Bank of Canada questioning its apparent commitment to even higher interest rates. However, with the large drop in education employment potentially reversing ahead, and with one more labour force survey before the Bank's October meeting, it still seems likely that at least one more rate hike will be in store before a pause is seen.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD on the defensive around 1.0400 after upbeat US data
EUR/USD is under mild selling pressure around the 1.0400 mark following the release of upbeat United States data. Q3 GDP was upwardly revised to 3.1% from 2.8% previously, while weekly unemployment claims improved to 220K in the week ending December 13.
GBP/USD struggles around 1.2600 after BoE rate decision
GBP/USD retreated from its daily peak and battles around 1.2600 following the Bank of England monetary policy decision. The BoE kept the benchmark interest rate unchanged at 4.75% as expected, but the accompanying statement leaned to dovish. Three out of nine MPC members opted for a cut.
Gold price resumes slide, pierces the $2,600 level
Gold resumes its decline after the early advance and trades below $2,600 early in the American session. Stronger than anticipated US data and recent central banks' outcomes fuel demand for the US Dollar. XAU/USD nears its weekly low at $2,582.93.
Aave Price Forecast: Poised for double-digit correction as holders book profit
Aave (AAVE) price hovers around $343 on Thursday after correcting more than 6% this week. The recent downturn has led to $5.13 million in total liquidations, 84% of which were from long positions.
Fed-ECB: 2025, the great decoupling?
The year 2024 was marked by further progress in disinflation in both the United States and the Eurozone, sufficient to pave the way for rate cuts. The Fed and the ECB did not quite follow the same timetable and tempo, but by the end of the year, the cumulative size of their rate cuts is the same: 100 basis points.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.