April 1, 2011 / 7:18 PM / 8 years ago

PREVIEW-UPDATE 1-Canada seen creating 26,500 jobs in March

 (Adds updated forecasts)
 WHAT: Canadian March employment report
 WHEN: Friday, April 8 at 7 a.m. (1100 GMT)
 REUTERS FORECAST (preliminary):
                    March      F'cast range    Feb
 Jobs gain/loss     +26.5K    +11.4K to +40K  +15.1K
 Unemployment rate  7.7 pct    7.6 to 7.8 pct  7.8 pct
 For individual forecasts see: [ECI/CA]
 Trend: The report will show whether job growth remained
lackluster for the second straight month or if there has been a
return to the more frenetic hiring pace of December and
January. The Canadian economy has created an average of 40,000
jobs per month for the past five months. But February's tepid
gain disappointed after two strong months, so markets will be
watching to see if the lull was temporary.
 During the economic recovery Canada has generally regained
lost jobs faster than the United States, but that trend may be
reversing as the neighboring economy outperformed Canada in
February and posted a second straight month of solid gains in
March. [ID:nNOAT00477]
 Growth: Economic growth picked up speed in the fourth
quarter of last year and early data show that momentum spilling
over into the first quarter of 2011, which should foster job
growth. [ID:nN31223177]
 Political fallout: Unemployment is a big theme in the
federal election campaign now in full swing ahead of a May 2
vote, especially in the hard-hit manufacturing belt in southern
Ontario, where the jobless rate was above the national average
in February at 8.0 percent.
 Wages: Annual wage inflation for permanent employees was
2.5 percent in February, up from 2.3 percent in January,
according to Statistics Canada's flagship employment survey.
 In a separate business census of non-farm payroll
employees, Statscan estimated a 4.2 percent advance in weekly
earnings in January from a year earlier.
 The employment report is the last data point available to
the Bank of Canada ahead of its April 12 interest rate
announcement. While market players have effectively ruled out
the chances of a rate hike this month, strong job numbers could
convince investors to pull forward their forecasts on the
timing of the next rate hike.
 The Canadian dollar would likely get a boost from an upbeat
report, or slip from recent highs if the numbers disappoint.
 Canada's primary securities dealers, surveyed March 18,
were largely split between May 31 and July 19 as the date of
the central bank's next move, with one of the 11 betting on
April 12. [CA/POLL]
 Overnight index swaps, which trade based on expectations
for the key central bank rate, imply a fully priced-in rate
increase on the bank's Sept. 7 decision date. BOCWATCH
 (Reporting by Louise Egan; editing by Jeffrey Hodgson)

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