CIBC Research discusses its reaction to today's Canada jobs report for the month of October.
"The Canadian labour market came out of its summer lull in spectacular fashion in October, with an unexpected surge in employment and wage growth. The 108K jump in jobs was well above the 10K consensus forecast, and was enough to offset the declines seen over the summer to take the level of employment above May's previous peak. All of the jobs were in full time positions, and were led by manufacturing, construction and accommodation & food service sectors. Despite the surge in jobs, a rebound in labour force participation meant that the unemployment rate held steady at 5.2%, although wage growth accelerated to 5.5%, from 5.2% in the prior month and against expectations for a slight deceleration," CIBC notes.
"However, while today's figure was much stronger than expected, the volatility of this survey and declines seen over the summer means that the 6-month average for employment gains is still only 9K, which is slightly below the pace of labour force growth. Coupled with the fact that there is one more employment report before the Bank of Canada's next meeting, today's data shouldn't change the narrative that we are closer to the end of the current rate hiking cycle than the beginning although it does support the call for a 50bp hike rather than 25bp in December," CIBC adds.