Canada: Weak Employment FORECASTER - CANADA #1 BEST … · Canada: Weak Employment HIGHLIGHTS f The...
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ECONOMIC NEWS François Dupuis, Vice-President and Chief Economist Hélène Bégin, Senior Economist • Benoit P. Durocher, Senior Economist • Francis Généreux, Senior Economist Desjardins, Economic Studies: 514-281-2336 or 1 866-866-7000, ext. 5552336 • [email protected] • desjardins.com/economics NOTE TO READERS: The letters k, M and B are used in texts and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. The data on prices or margins are provided for information purposes and may be modified at any time, based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. The opinions and forecasts contained herein are, unless otherwise indicated, those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group. Copyright © 2018, Desjardins Group. All rights reserved. Canada: Weak Employment HIGHLIGHTS f The labour market lost 51,600 jobs in August. Most forecasters were expecting a slight increase instead. f The decline was recorded mainly in the 55-plus cohort. Only 5,700 jobs were lost in the 25-to-54 population, while 3,600 young people (15-to-24) were hired for new jobs. f The unemployment rate ticked up from 5.8% to 6.0%. f The annual change in the average hourly wage contracted for the third straight month, from 3.2% to 2.9%. With an annual increase of 4.5%, the median hourly wage growth remains nonetheless very high. Keep in mind that this last measure has fewer distortions tied to the fluctuations between very high or very low wages. COMMENTS Considering the high volatility in the Labour Force Survey results, the loss of 51,600 jobs in August is not too worrisome, especially given the 54,100-job gain posted in July. That said, the next few months will be decisive for shifts in the employment trend. The August data shows that the 6-month moving average started to decline again, to only 9,700. In theory, this advance is too weak given the growth outlook of about 2% on average for Canada’s economy for the rest of 2018, based on our estimates. We therefore expect employment to rebound in the months ahead. IMPLICATIONS For the moment, the changes in the labour market should not concern the monetary authorities too much, or stand in the way of further key rate increases. Moreover, hourly wage growth remains relatively high, historically speaking. The sharper increase in average weekly earnings gleaned from the business survey confirms this. ECONOMIC STUDIES | SEPTEMBER 7, 2018 Benoit P. Durocher, Senior Economist GRAPH 1 The employment trend has been weaker these past few months Sources: Statistics Canada and Desjardins, Economic Studies Monthly change in employment In thousands -100 -80 -60 -40 -20 0 20 40 60 80 2015 2016 2017 2018 Employment 6-month moving average GRAPH 2 Wage growth remains relatively high Sources: Statistics Canada and Desjardins, Economic Studies Hourly wage Annual variation in % 0 1 2 3 4 5 2015 2016 2017 2018 Average Median #1 BEST OVERALL FORECASTER - CANADA
Transcript of Canada: Weak Employment FORECASTER - CANADA #1 BEST … · Canada: Weak Employment HIGHLIGHTS f The...
ECONOMIC NEWS
François Dupuis, Vice-President and Chief Economist Hélène Bégin, Senior Economist • Benoit P. Durocher, Senior Economist • Francis Généreux, Senior Economist
Desjardins, Economic Studies: 514-281-2336 or 1 866-866-7000, ext. 5552336 • [email protected] • desjardins.com/economics
NOTE TO READERS: The letters k, M and B are used in texts and tables to refer to thousands, millions and billions respectively.IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. The data on prices or margins are provided for information purposes and may be modified at any time, based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. The opinions and forecasts contained herein are, unless otherwise indicated, those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group. Copyright © 2018, Desjardins Group. All rights reserved.
Canada: Weak EmploymentHIGHLIGHTS
f The labour market lost 51,600 jobs in August. Most forecasters were expecting a slight increase instead.
f The decline was recorded mainly in the 55-plus cohort. Only 5,700 jobs were lost in the 25-to-54 population, while 3,600 young people (15-to-24) were hired for new jobs.
f The unemployment rate ticked up from 5.8% to 6.0%.
f The annual change in the average hourly wage contracted for the third straight month, from 3.2% to 2.9%. With an annual increase of 4.5%, the median hourly wage growth remains nonetheless very high. Keep in mind that this last measure has fewer distortions tied to the fluctuations between very high or very low wages.
COMMENTS
Considering the high volatility in the Labour Force Survey results, the loss of 51,600 jobs in August is not too worrisome, especially given the 54,100-job gain posted in July. That said, the next few months will be decisive for shifts in the employment trend. The August data shows that the 6-month moving average started to decline again, to only 9,700. In theory, this advance is too weak given the growth outlook of about 2% on average for Canada’s economy for the rest of 2018, based on our estimates. We therefore expect employment to rebound in the months ahead.
IMPLICATIONS
For the moment, the changes in the labour market should not concern the monetary authorities too much, or stand in the way of further key rate increases. Moreover, hourly wage growth remains relatively high, historically speaking. The sharper increase in average weekly earnings gleaned from the business survey confirms this.
ECONOMIC STUDIES | SEPTEMBER 7, 2018
Benoit P. Durocher, Senior Economist
GRAPH 1The employment trend has been weaker these past few months
Sources: Statistics Canada and Desjardins, Economic Studies
Monthly change in employment
In thousands
-100-80-60-40-20
020406080
2015 2016 2017 2018
Employment 6-month moving average
GRAPH 2Wage growth remains relatively high
Sources: Statistics Canada and Desjardins, Economic Studies
Hourly wage
Annual variation in %
0
1
2
3
4
5
2015 2016 2017 2018
Average Median
#1 BEST OVERALLFORECASTER - CANADA
