Friday morning's stronger-than-expected Canadian employment report may not have been as unabashedly bullish as it appeared at first glance. Indeed, the experts are somewhat divided about whether the jobs market is quite as healthy as the headline number (a gain of 30,600 jobs in September) suggested. Here's a quick sampling of what some of Canada's top economists and market strategists are saying:
"This morning’s employment report is very good news for the Canadian economy. ... With the recession over in the labour market and the biggest decrease in the unemployment rate since November 2005, our call for a rate increase by the Bank of Canada in the first quarter of 2010 remains on track." - Yanick Desnoyers, National Bank Financial
"All of the job growth in September was in either the public sector (+36.4K) or the self-employed category (+11.6K), at the expense of -17.1K jobs shed in the private sector. ... In the absence of a transition to private-sector employment and developing private-sector economic demand, the transition from fiscal stimulus to private-sector demand may prove turbulent. In September it appears that the private sector is inclined to continue right-sizing their businesses, in keeping with the depleted state of the domestic and global economy." - Stewart Hall, HSBC Securities Canada
"September usually sees a very large drop in raw (non-seasonally adjusted) employment numbers as students leave summer jobs to go back to school. But this year we know that the youth job market was a disaster, meaning that a larger-than-normal number of students exiting the labour market at the end of August were not even working, or if they were, only had part-time jobs. That suggests that StatCan’s regular upward seasonal adjustment to take account of this market dynamic overstated the strength of the Canadian labour market in September." - Meny Grauman, CIBC World Markets
"This is the sound an economy makes when an economy recovers. Today’s report also highlights the deep divide between the North American job markets, with Canada in a much friendlier place." - Douglas Porter, BMO Nesbitt Burns
"The subtext to this report is simply that the Canadian economy is absorbing the excess labour capacity at a much faster pace than expected, and while we are not entirely convinced that this dramatic pace of job creation can be sustained, we believe that it will certainly lead the Bank of Canada to focus on the timing of future interest rate increases set out in its conditional commitment to hold interest rates at the current level until Q2 2010. Nonetheless, while for now we continue to expect the policy rate to remain unchanged until Q4 2010, we think that the risks of an earlier move have increased dramatically." - Millan Mulraine, TD Securities
