Unexpected surge in Canadian jobs in October makes 50 bps from BOC more likely – CIBC

CIBC Research discusses its reactions to today’s Canadian employment report for October. „Canada’s labor market broke out of its summer lull in spectacular fashion in October as employment and wage growth unexpectedly picked up. The 108,000 job gain was well above the consensus estimate of 10,000 and was enough to offset the declines seen in recent years. the summer employment rate above previous peak in May All jobs were full-time, led by the manufacturing, construction and housing and food service sectors Despite the job gains, the recovery in the labor force participation rate meant that the unemployment rate remained steady at 5.2 percent, although wage growth accelerated to 5.5 percent from 5.2 percent last month and, contrary to expectations, for a slight slowdown,” notes CIBC. „While today’s number was much higher than expected, the volatility in this survey and the declines seen over the summer mean that the six-month average employment growth is still only 9,000, slightly slower than the pace of job growth. Together with the fact that before the next report from the Bank of Canada, which has another jobs report, today’s data should not change the narrative that we are closer to the end of the current rate hike cycle than the beginning, although it supports the call for a 50bp increase from December’s 25bp,” adds CIBC. For bank trading ideas, see eFX Plus. Get a limited time 7-day free trial, basic version for $79/month and premium version for $109/month Bring it here.