Canada’s job creation is likely to have come in weak in the month of February. According to a TD Economics research report, job creation is expected to have printed a subdued 2k in the month, following January’s cold showed of -88k. While outsized LFS prints tend to reverse the following month, the dismal January report is mostly explained by the effect of the Ontario minimum wage hike and unsustainable gains in the prior three months as LFS outperformed the less timely SEPH measure by about 130k in the fourth quarter, the largest gap on record, stated TD Economics.
Furthermore, the Ontario minimum wage hike is expected to continue to be a drag on the regional labor market and might see further job losses in February, concentrated in low-wage industries. There does not seen to be any scope for a reversal in the full/part time split at the national level, which might add a negative tone to the headline print.
“We expect a small rebound in labour force participation after the rate fell 0.3pp in January, though the unemployment rate should hold at 5.9 percent from an unrounded 5.85 percent the prior month. Finally, wage growth for permanent employees is expected to slip to 3.0 percent from 3.3 percent on base effects and moderating underlying wage pressures”, added TD Economics.
At 21:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was highly bullish at 163.759, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -14.012. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
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