Fri Sep 30, 2011 8:18pm BST

WHAT: Canadian September employment report

WHEN: Friday, Oct. 7, at 7 a.m. (1100 GMT)

REUTERS FORECAST:

ECONCA

Sept F’cast range prior (Aug)
Jobs gain/loss +10.0K -20K to +30K -5.5K
Unemployment rate 7.3 pct 7.2 to 7.4 pct 7.3 pct

For individual forecasts see: [ECI/CA]

FACTORS TO WATCH:

Recovery:

Employment is expected to bounce back modestly after
August’s surprise job loss. Twenty-one of 24 forecasters
surveyed by Reuters see a gain.

Education:

Teachers and assistants returning to work should provide
some of the bounce — education employment had fallen by 30,000
in July, rising by 9,500 in August. Despite Statistics Canada’s
efforts to adjust for seasonality, a Scotia Capital study shows
that 21,000 to 43,000 education jobs were added in the
back-to-school season each year since 2007.

Economic jitters:

However, continued economic uncertainty as the result of
Europe’s debt crisis is seen tempering growth. The jobs report
will help show how big an effect this is having on the Canadian
economy.

Wages:

Wages should remain subdued. The annual growth in the
average hourly wage of permanent employees, watched by the Bank
of Canada for inflationary pressures, rose to 1.5 percent in
August from 1.2 percent in July, in either case well below the
bank’s 2 percent inflation target. The lack of domestic price
pressures makes it easier for the central bank to justify
keeping rates low for longer in the face of a global
downswing.

MARKET IMPACT:

Any upside surprises in employment should give a bit of
bounce to the Canadian dollar, which hit a 12-month low on
Friday, and put a damper on bonds.

While bank economists say the next interest rate move by
the Bank of Canada will be up, the market has priced in a cut
BOCWATCH, and strong employment gains would mitigate the need
for a cut.

Weaker-than-expected employment would have the reverse
effect, putting new pressure on the Canadian dollar and
providing a fillip to bonds.
(Reporting by Randall Palmer; Editing by Jeffrey Hodgson)

Article source: http://uk.reuters.com/article/2011/09/30/canada-economy-jobs-idUSS1E78T1ES20110930

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