Canadian Employment Preview: Forecasts from six major banks for April jobs report

Canada publishes its labor figures on Friday at 14:30 GMT, and the economic calendar is pointing to a loss of 175,000 jobs, accompanied by an increase in the jobless rate to 7.8%. Low estimates come despite the broad recovery. USD/CAD is trading below 1.22 ahead of the release. 

Here you can find the forecasts of economists and researchers of six major banks regarding the upcoming employment data.

See: USD/CAD set to fall towards the 1.2062 2017 low – Credit Suisse

RBC Economics

“Canadian employment likely pulled back in April as virus containment measures were re-imposed in parts of the country. We expect an 85K drop, heavily concentrated in another round of job losses in the retail and hospitality sectors. That would still only retrace about 15% of the whooping 562K job gains over February and March during a lull in virus spread between the second and third waves. Outside of those high-contact service sectors we expect job growth to be largely unscathed from targeted restriction measures. We look for the unemployment rate to edge up to 7.7%”

TDS

“We look for Canadian employment to fall by 175K in April, with risks tilted towards a larger decline, as new lockdown measures drive layoffs across the service sector. Retail trade and food services will account for a large portion of total job losses. This should push the unemployment rate to 8.0% while hours worked will give insight into growth conditions for April and the economic impact of recent lockdowns.”

Capital Economics

“We estimate that the latest restrictions caused employment to decline by 200,000 in April. Assuming some of those people drop out of the workforce while they wait for the restrictions to be lifted, the unemployment rate should remain below 8%.”

NBF

“After rebounding strongly in February and March, the job market probably suffered some heavy losses in April following the reintroduction of social distancing measures in several provinces to prevent the spread of COVID-19. We are calling for a -175.0K print that could lead to a 5-tick increase of the unemployment rate to 8.1%, assuming the participation rate fell back to 65.0%.”

CIBC

“Employment data for April will begin to reveal the extent of economic damage inflicted by the third wave of the virus. Job creation heading into the month had been driven by growth in high-contact sectors. But another round of necessary shutdowns meant that there was likely significant pain felt by employees and businesses in those industries. The delaying of March Break in Ontario also led to a questionable gain in the seasonally-adjusted education employment numbers in the prior release. The reversal of that effect on the data will also be a drag on the numbers for April. We are calling for a -90K print. Our call for the unemployment rate to rise back to 7.8% assumes that the report will only capture some of the losses and the rest will show up in the May numbers. However, the risk is that job destruction caused by the third wave was more front-loaded.” 

Citibank

“Following two months of strong job gains resulting from temporary re-openings, we expect job losses of 210K in April. The April employment report will cover the period from mid-March to mid-April when lockdowns were reintroduced.”