By Danny C. | DCPeriodical | 12/06/19 |
According to a new jobs report, ‘Canadian employment unexpectedly tumbled by 71,200 in November, the biggest decline since the financial crisis,’ says ZeroHedge.
For those hoping that the details might serve up better news, they too were disappointed: Full-time employment was down 38.4k, and the private sector shed 50.2k. The jobless rate also rose sharply, up four ticks, and also the biggest monthly jump since the recession, to 5.9%.
Hours worked fell 0.3%, and remain an area of persistent disappointment—they’re now up just 0.25% y/y, much more muted than the 1.6% annual job gain. Oddly enough, the one area of strength was wages, with growth accelerating to match a cycle high at 4.5% y/y, according to Kavcic–ZeroHedge, 12/06/19.
The Bank of Montreal rated the report at 12.1 points out of 100, making this the worst score seen since 2013 — job losses themselves being the worst figures since 2009.
Wells Fargo strategist Brenda McKenna deemed the report ‘terrible’ and stated nothing could be done about these deplorable figures for the time being, numbers she predicts will not shift until next year.
With that said, the LFS has been known to have some violent swings, and we could be getting a lot of payback for previous outsized strength in one fell swoop. Looking at 1.6% y/y job growth, and an average monthly gain of 26k through November, those numbers look pretty consistent with underlying economic performance.
The “terrible” number may force the BOC to reassess its monetary policy. Earlier this week, the Bank of Canada presented a strong defense of its decision to stand pat on its policy rate for a ninth straight meeting. Deputy Governor Timothy Lane said policy makers believe Canada’s economy is near capacity. Recent developments, both domestic and global, have bolstered the central bank’s confidence that growth is poised to accelerate over the next couple of years, despite “enduring” uncertainty, he said.–ZeroHedge.
To add to this, Bloomberg has reported that Canada’s dollar is also in one of its worst declines in a long time.
The loonie slumped by 0.6% to 1.3255 per dollar, its biggest daily decline since October, putting it in a neck-and-neck race with the British pound for the No. 1 spot among major currencies in 2020.–Bloomberg, 12/06/19.
While some economists have tried to ease concern about the job market, such as ZipRecruiter’s Julia Pollak who said ‘that the numbers are highly volatile’ and not to worry, doubts about Canada’s currency have been expressed all over the global financial sector, and these new jobs numbers aren’t helping to change anyone’s mind.
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