Canadian Jobs Preview: Forecasts from four major banks, employment may suffer a bit of retreat

Canada’s employment data for February will be reported by Statistics Canada on Thursday, April 6 at 12:30 GMT and as we get closer to the release time, here are forecasts from economists and researchers at four major banks regarding the upcoming jobs figures. 

The North American economy is expected to have added 12K jobs after creating 21.8K positions in February. The unemployment rate is expected to rise a tick to 5.1% while the Participation Rate is expected to have remained stable at 65.7%.

TDS

“We look for employment to fall by 12K, unwinding a small portion of recent strength, with UE rising 0.2pp to 5.2% as wage growth firms to 5.5% YoY.”

NBF

“The job market has been extraordinarily strong recently, with headcounts expanding by 350K over the past six months. And while signs of an upcoming reversal remain few and far between, we think such a pace is unsustainable in the medium term. We thus expect more modest gains in the coming months, starting with a 10K result in March. Despite this gain, and assuming that the participation rate remained unchanged at 65.7%, the unemployment rate could still increase by one tenth to 5.1%, the result of yet another sharp expansion of the labor force.”

CIBC

“We expect to see a modest decline in employment during March (-10K), although that would still leave a very positive underlying trend, as measured by 3 and 6-month averages. A slight tick down in the participation rate as well is expected to limit the impact that the expected weak employment figure has on the jobless rate, as we see that rising by only one tick to 5.1%. Wage growth should be less volatile now that we are past the comparisons to lockdown periods in 2022, although that’s also likely to mean little deceleration from last month’s 5.5% pace.”

Citi

“After a few months of very strong employment gains, we expect a modest 10K drop in employment in the labor force survey in March, although with risks tilted to the upside due to strong population growth from immigration. An eventual contraction in activity later this year alongside slowing in the US which should result in job losses, but even in this scenario, the rise in unemployment could be relatively muted. Expectation for modest job loss in March would imply an increase in the unemployment rate to a still-low 5.2%.”