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CANADA ECONOMICS: Scotiabank Previews Friday's January Jobs Report

· 02/05/2021 02:40

07:37 AM EST, 02/05/2021 (MT Newswires) -- Scotiabank noted that Canada will update its jobs report -- the Labour Force Survey (LFS) -- for January at 8:30 a.m. ET on Friday.

The bank went with a 70,000 decline (market consensus was for a 40,000). There was a bit of skewness that pushed the consensus average toward a 63,000 decrease but that was almost entirely because one outlier went with 300,000 job losses.

Otherwise, the highest estimate was for a 20,000 fall. No one went positive.

Canada saw tighter restrictions emerge than in the United States and small business turned less confident toward hiring over coming months, but Scotiabank really didn't see much effect across measures like weekly claims across all EI, CEWS and CERB programs as occurred the prior month, nor was there a repeat of the same deterioration in alt-data like high-frequency Google searches for information on these programs.

Mobility readings deteriorated but mostly in December.

So, the bottom line for Canada was that what little information the bank had going into the report didn't tend to showcase the kind of deterioration you might expect from lockdowns, restrictions, stay-at-home orders and school closings.

That could either be because support programs offered a solid backstop for the job market and/or because there were enough sectors outperforming on jobs to offset pain in a few like the accommodation, food/drink services and recreation areas of the economy and/or perhaps because parents adapted to school closures in some areas especially if they were viewed as temporary.

If jobs did fall harder, then they were likely to just bounce higher in subsequent months given already existing momentum to ease up on some restrictions, according to Scotiabank.