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Previewing the Canadian job report for December, “the labour market is set to close the year on a much softer footing with layoffs anticipated from a new round of COVID lockdowns,” TD Securities analysts said.

Key quotes

“We forecast -125k jobs lost in December, which would match the largest single-month decline before COVID but is far less severe than the historic job losses in March/April 2020. Part of this reflects the timing of new lockdown measures, with circuit-breaker shutdowns in Ontario & Quebec coming after the reference week.”

“Another mitigating factor is a substantial share of Canadians (4.6m) who were already working from home in November. Job losses will be felt most prominently in service-producing industries where remote work is less feasible, with food services/ accommodation expected to weigh heavily.”

“125k jobs lost in December should leave the unemployment rate sitting at 8.7%, up 3.2pp from the start of the year, with an offsetting decline to labour force participation.”