Posthaste: Canada’s job numbers land with a thud and knock the wind out of the Canadian dollar
Canada’s job numbers landed with a thud this morning, racking up a surprise loss of 1,800 jobs in October, when economists had expected up to a 15,900 gain. What really hurts is full-time positions fell by 16,000. The country’s manufacturing sector also lost 23,100 jobs in October, mostly located in Ontario, confirming the Bank of Canada’s fears that weak global demand is starting to weigh on the economy, says Capital Economics.
The Canadian dollar also took a hit, falling to a three-week low of 75.57 US cents.
“After a couple of months of outsized gains, Canada’s labour market didn’t get the job done in October. While the slight decline in employment still leaves headline job growth showing very healthy gains over the past year, that has come in contrast to both GDP and hours-worked data. We continue to see a convergence coming from a deceleration in the employment numbers, eventually leading the Bank of Canada to trim rates, and today’s data could be a first step in that direction,” said CIBC economist Royce Mendes.
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Markets have twitched at every twist in the ongoing trade dispute between China and U.S. and today is no exception. Yesterday stocks climbed to new highs on reports that China and the U.S. have agreed to roll back tariffs as part of a ‘phase one’ trade deal. Today word that that agreement faces fierce internal opposition in the White House cast cold water on the euphoria. U.S. futures are pointing to a flat or slightly soft open and caution rules across world markets as investors, worried the pact could fall apart, sell before heading into the weekend, reports Reuters. So what happens if they actually do seal a deal. Probably not much, reckons Capital Economics’ Simona Gambarini. Capital believes markets have already priced in most of the good news, and even if a deal is finalized tensions between the two countries won’t go away. “There is more to the rift between the U.S. and China than trade alone. China’s rapid emergence as an economic superpower makes it a threat to the U.S. As such the decoupling between the two countries will continue in our view.” Nor will a trade deal stop growth from slowing in the U.S., China and elsewhere, says Capital, which expects stocks to make no headway between now and the end of next year, a far worse performance than in recent decades.
Here’s what you need to know this morning:
- Ontario Vic Fedeli, Minister of Economic Development, Job Creation and Trade, will hold a press conference at Queen’s Park to discuss the latest release of Statistics Canada jobs numbers
- Alberta Energy Minister Sonya Savage to announce policy “to help support jobs and investment in communities across Alberta”
- Aurora Cannabis Inc. holds its annual general meeting of shareholders in Edmonton
- Notable earnings: Enbridge, Emera, Magna International, GMP Capital, Onex, Cascades Inc, Dream Office REIT, Lundin Gold, Sprott Inc
- Today’s data: Canadian labour force survey, Canadian building permits, Canadian housing starts, U.S. wholesale trade, University of Michigan consumer sentiment index
Canadian superstar Drake joined the growing list of celebrity cannabis entrepreneurs when he launched the new company More Life Growth with Canopy Growth Thursday. The recording artist, centre, follows (from bottom left clockwise) Willie Nelson, Gwyneth Paltrow, Francis Ford Coppola, Whoopi Goldberg, Patrick Stewart, Joe Montana, Snoop Dogg, Tommy Chong and Martha Stewart. Drake isn’t the first celebrity to sign on with Canopy. Others include Martha Stewart, rapper Snoop Dogg and actor Seth Rogan. So can star power help Canopy revive its stock, which is down 63% since April? Jefferies analyst Owen Bennett told Bloomberg that celebrity brands could actually work against the company. “Every additional celebrity or licensed brand they add runs the risk of creating customer confusion and even diluting sales around Tweed,” Canopy’s core brand, he said.
With files from The Canadian Press, Thomson Reuters and Bloomberg