CIBC is out with a review today Canada jobs report:
- Despite strong headline job numbers, the underlying details were mostly negative
- They cite: Large public sector job gains, highest unemployment rate since 2016, lowest wage growth since June 2023
- The weak labor market, along with slow GDP growth, indicates economic growth
- Private sector employment grew by only 1.3% over the past year, less than half of the 2.8% growth in the workforce.
CIBC writes:
The above headline gain in employment was pretty much the only good news in today's data. The larger-than-expected increase in unemployment, weakness in hours worked and slowing wage growth all support our call for a 50bp cut by the Bank of Canada next week. The weakening labor market, combined with the still sluggish trend in GDP, also supports our view that interest rates will need to fall below neutral next year to accelerate growth and reduce the rate of growth in the economy.
The Bank of Canada decision is December 11 and the market is now pricing in a 78% chance of a 50 bps cut, up from 52% before the data. USD/CAD is up 124 pips to 1.4146 and near a four-year low.
