Canadian labour market to close year on much softer footing – TDS

Eren Sengezer FXStreet

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."

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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