Today’s data showed better-than-expected number with an increase in employment of 94K above the 11K of market consensus and the unemployment rato dropped to 5.6%, a record low. According to National Bank of Canada analyst, Krishen Rangasamy, the solid jobs report does not guarantee a January rate hike by the Bank of Canada, considering the central bank understands how volatile this report can be and, most importantly, the darker outlook for 2019 brought by sinking oil prices.
“Canada’s November jobs tally was impressive, but so was the breadth and composition of gains particularly in the private sector and in full time positions. The only blemish in the jobs report was the decline in wage inflation to the lowest in over a year.”
“While encouraging, the overall LFS report has to be interpreted with caution given its volatility. We tend to look at that survey’s 12-month average to get a better idea of employment creation and on that score Canada is doing well, albeit not as well as last year ─ the +18K/month average compares to the +33K/month average a year ago. That’s consistent with a moderation of real GDP growth this year after a very strong 2017.”
“Unless oil prices pick up significantly, one can expect a moderation in overall Canadian employment growth in 2019.”