Canadian Employment Preview: Forecasts from five major banks for May jobs report

Canada publishes its labor market figures on Friday at 12:30 GMT, and a minor loss of jobs is on the cards in May, in the wake of a lockdown in April. Here you can find the forecasts of economists and researchers of five major banks regarding the upcoming employment data.

As FXStreet’s Analyst Yohay Elam notes, erratic figures set to shape USD/CAD's battle with 1.20.

RBC Economics

“Canadian labour market report will show yet another step back in the employment recovery with employment expected to fall by 75K in May. Job losses will be concentrated in the hospitality and retail sectors due to the third wave of virus spread and containment measures. We look for the unemployment rate to inch higher to 8.4%. May job losses will build on April’s 207K drop to retrace half of the gains in February and March during the lull between the second and third waves.”

NBF

“With some provinces having been forced to tighten social distancing rules during the month, job losses are to be expected. Our call is for 25K drop in employment that could leave the unemployment rate unchanged at 8.1%, assuming the participation rate fell one tick to 64.8%.”

CIBC

“The Labour Force Survey will likely show another decline in employment for May, particularly since there also won’t be the typical seasonal hiring of college and university students in the services sector. That said, we’re penciling in a somewhat modest drop of 20K given that larger-than-anticipated declines in April suggest much of the pain in the affected provinces was frontloaded.”

TDS

“We anticipate a muted labour market recovery with job growth of 25K in May as most of the country remained under lockdown conditions through the reference week. Job growth should be led by the goods-producing sector and other industries not directly targeted by lockdown measures, while public administration will continue to benefit from hiring for the 2021 census. Job growth of 25K should see the unemployment rate tick lower to 8.0% while hours worked will give an early look at growth conditions for May. Looking ahead, the continued improvement in the COVID-19 backdrop and recent announcements on re-opening should allow for more substantial labour market gains in the June LFS, and point towards a return to pre-COVID employment levels this summer.”

Citibank

“After a 207K decline in Canadian employment in April, employment should decline by a further 80K jobs but with re-openings in some regions set to begin as early as this week, we expect the June employment report to reveal substantial job gains.”