Canada: Booming labor market does not argue for monetary stimulus – NFB

Today’s employment report from Canada came in above expectations showing a gain in jobs of 53K in September against the 10K expected. According to Matthieu Arseneau, analyst at National Bank of Canada, explains the data does not argue in favor of more monetary stimulus from the central bank.  

Key Quotes:

“The LFS employment report beat expectations by a wide margin for a second consecutive month. That said, given current global uncertainties, some may be worried by September’s drop in private sector jobs. In our view, it’s too soon to conclude that it’s the start of an undesired trend as this pullback followed an outsize surge of 94K jump jobs in August. Despite September’s drop, private jobs creation so far in 2019 is the highest since 2010 over the first 9 months of the year.“

Total employment, meanwhile, is up a whopping 358K this year in Canada. That’s the best showing since 2002, with no less than 83% of those jobs being full-time. Such a development helps support household formation and the housing sector.”

“While trade disputes remain a concern for global growth going forward, the booming labor market in Canada does not argue for monetary stimulus at this point. Case in point, hourly wages of permanent workers increased in Q3 at their fastest clip in a decade.“