Watch for these economics highlights.
- Labour force survey (Friday)
A pullback wouldn’t be unexpected after an additional 238,000 jobs were added between September and March — a seven-month tally seen only once before since the recession.
But any decline in jobs should be moderate. In an industry note, National Bank forecasts a net decline in employment of about 10,000 and an uptick in the jobless rate to 6.8%.
In a weekly economics update by CIBC World Markets, director Nick Exarhos says he expects modest employment gains for April. Continued progress on jobs puts pressure on wages, which have been stuck in the 1% to 2% range. “That will be key in seeing the Bank of Canada become more comfortable about the sustainability of the recent growth spurt,” he says, referring to strong GDP results.
- ISM manufacturing (today)
- Employment data (Friday)
The manufacturing report, released today, revealed a 2.4-point decline in April — a bit weaker than expected. A large decline in new orders and a small increase in inventories has resulted in a narrowing spread between the two. “This suggests that manufacturing activity is likely to expand at a more gradual pace in upcoming months,” says Fotios Raptis, senior economist at TD Bank, in an economics note.
But manufacturing and other data being released this week aren’t expected to affect the Fed, as it decides on monetary policy on Wednesday.
“The central bankers will stand pat as expected on Wednesday,” says Avery Shenfeld, chief economist, in the CIBC report. “But we’re still holding to our call for a June hike.”
He’s holding because of expected employment data to be released Friday. Shenfeld expects “a healthy (if a bit below consensus) job gain and a 0.3% rise in wages reminding markets that we’re closing in on full employment.”
Also read: Economic growth around the world