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Sep 09 - 09:55 AM

CAD: Jobs Report: Summer Lulling Continued In The Canadian Labor Market - CIBC

By eFXdata  —  Sep 09 - 08:57 AM

CIBC Research discusses its reaction to today's Canadian jobs report for the month of August. 

"Summer lulling continued in the Canadian labour market, with a 40K decline in jobs marking the third consecutive monthly decline. However, unlike the prior two months, the latest drop can't be easily brushed aside as a consequence of reduced labour supply. Indeed, the participation rate actually edged up in August, meaning that the decline in employment took the unemployment rate up to 5.4% (from 4.9% and against expectations for a modest increase to 5%). A 28K decline in construction jobs (a sector previously booming) shows that interest rate hikes are having a impact on the labour market. However, the near 50K decline in education employment is more likely to represent difficulties in seasonal adjustments within this sector," CIBC notes. 

"Overall, the weak headline figures may have the Bank of Canada questioning its apparent commitment to even higher interest rates. However, with the decline in education employment potentially reversing ahead, and with one more labour force survey before the Bank's October meeting, it still seems likely that at least one more rate hike will be in store before a pause is seen," CIBC adds. 

Source:
CIBC Research/Market Commentary

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