As economist Peter Buchanan notes, “forecasting Canada’s fickle monthly job growth series isn’t for the faint of heart.”
Which is why analysts have such different expectations for Friday’s December employment report from Statistics Canada.
Mr. Buchanan of CIBC World Markets, for example, expects the report to show the economy created 15,000 jobs last month while unemployment held steady at 6.9 per cent.
Many other economists are in his general ballpark, projecting some 13,000, though Toronto-Dominion Bank forecasts a jobs gain of only 5,000.
“There aren’t any special factors guiding our call, so we’re stuck with our view that job gains should be in line with the average implied by the fairly run-of-the-mill pace of Canadian economic growth that we’ve seen the data released so far covering 2013,” said Derek Holt and Dov Zigler of Bank of Nova Scotia, who are in the 15,000 camp.
Analysts will be watching for where jobs were won and lost. “Recouping some of the past year’s losses, manufacturing was a key job driver in November,” Mr. Buchanan said in a research note.
“With a lower dollar and signs of improvement stateside lifting sentiment, we expect that sector to add positions again in December,” he said.
“Business and health services should see further job gains. The lower dollar could also help the hospitality sector. Softening home resales could contrarily take a toll on the finance, insurance and real estate sectors.”
Also on tap on Friday is the key U.S. jobs report, again with differing opinions among observers, many expecting to see some 191,000 jobs were created in December, and that country’s unemployment rate holding at 7 per cent.
Economists at Royal Bank of Canada note than job creation in the United States has been running at between 175,000 and 200,000 recently, and they expect that to continue “for the foreseeable future.”
Thus, they believe the United States created 185,000 jobs in December, with the jobless rate inching up to 7.1 per cent. “While most of the components should post consistent growth, the retail space will probably continue to cool off from the recent hot streak,” they added.
Andrew Grantham of CIBC World Markets believes, however, that a setback in the U.S. retail industry was offset by a pickup in employment in construction, and perhaps manufacturing, too.