Canada: Employment likely continue to growth in July, at a slower pace – RBC CM

Next Friday, the official employment report for July is due in Canada. Analysts at RBC Capital Markets expect a positive change in employment of 400K, below market consensus of 653K. 

Key Quotes: 

“Canadian labour markets probably continued to look a little better in July. Though the 400k increase in employment we expect would still leave the job count down about 1.4 million compared to February levels, even after the 1.2 million jobs added over May and June. Labour force participation likely also continued to rebound but we still expect job growth to be enough to push the unemployment rate down to (a still elevated) 11% from 12.3% in June.”

“Statistics Canada’s preliminary estimate is that Canadian GDP declined an unprecedented 40% at an annualized rate in the second quarter.  But things looked less bad towards the end of the quarter with output up in both May and June – and our own tracking suggesting if anything some upside risk to the 5% increase in GDP the statistics agency pencilled in for June.”

“Consumer confidence is still subdued but ticked higher in July, and early indicators from card-spending data suggest that household spending has largely held onto earlier gains to-date.”