USD/CAD is trading around 1.25 ahead of Canadian July jobs report due out at 12:30 GMT. An increase of 177,500 positions is expected as Canada extends its reopening after lockdowns in the spring. The Unemployment Rate is set to drop from 7.8% to 7.4%. As we get closer to the release time, here are the forecasts of economists and researchers of five major banks regarding the upcoming employment data.
As FXStreet’s Analyst Joseph Trevisani notes, July Net Employment Change could bring recovery to 95% of lockdown losses.
CIBC
“On top of the very good news for employment in June, which coincided with the reopening of many businesses, we expect the Labour Force Survey will show another solid increase in hiring for July. Job creation likely continued during the month in the sectors that had been hardest hit by COVID-19 restrictions earlier in the year. The addition of 100K more jobs would mean that the combined hiring in June and July added up to more than the number lost during the third wave. There might, however, be some evidence of labour shortages, similar to those seen in the US during the early days of its reopening, albeit likely to a lesser extent. Anecdotal evidence from conversations with a range of businesses in Canada suggest that sourcing workers has been somewhat difficult even in industries less affected by covid. It could become more of an issue later this summer as idle labour supply falls even further.”
NBF
“Our call is for a 100K increase in employment, a gain that would allow the unemployment rate to decline two ticks to 7.6%, assuming the participation rate rose from 65.2% to 65.3%.”
TDS
“We look for the labour market to maintain recent momentum with another 215K jobs added in July, pulling the unemployment rate 0.5pp lower to 7.3%. Services should drive job growth on rehiring across industries most impacted by COVID-19, and if realized our forecast would leave total employment just 125K (-0.7%) below pre-COVID levels.”
RBC
“We expect employment increased 150K in July trimming the employment shortfall to 190K compared to February 2020. The unemployment rate is expected to fall to 7.2% from 7.8% in the prior month. Canada’s labour force already fully recovered its pandemic-related losses in June and we expect the labour force participation rate to tick up slightly higher again in July.”
Citibank
“We expect a solid reopening-period job growth for the second month in a row with 180K jobs added in July, just slightly softer than the 231K added for the first month of reopening in June. With activity likely to continue to climb in August, the employment gains likely means substantial progress towards the BoC’s outlined employment goal necessary for considering rate increases is much closer (currently around 550K after the June report).”
