The Canadian employment report surpassed expectations with a positive change in emlyment of 108K above the 10K of market consensus. Analysts at CIBC point out the surge could simply be a sign that some of the declines seen over the summer were simply statistical noise. According to them, the data support their call for a further 50bp interest rate hike at that time, but they warn there is still one more employment report to come before the next Bank of Canada (BoC) meeting.
Key Quotes:
“The big rebound in employment during October, accompanied by a rebound in the size of the labour force, is likely a sign that the declines seen over the summer were largely statistical noise, rather than a sign that the labour market truly surged ahead this month.”
“The breakdown of employment showed that all of the jobs created were full time positions, with part time actually down slightly relative to the prior month. Most of the jobs created were among private sector employees, although public sector employment and self-employment also rose.”
“Today's data support our call for a 50bp hike at the December meeting, rather than a more standard 25bp move, although there are plenty of economic data releases still between now and then, including one more labour force survey.”
