Economists are betting on an upward revision when Statistics Canada announces a correction to last week’s jobs data tomorrow morning, although the magnitude of the revision is anyone’s guess.
Earlier this week, StatsCan revealed that there was a mistake in the unemployment data for July that it released last Friday, which showed a net gain of just 200 jobs, as a decline in full-time jobs almost perfectly offset a gain in part-time positions. It is planning to publish a correction on Friday August 15.
“No indication has been given on the direction of the revisions but the market consensus anticipates a much stronger job creation number than what was initially reported,” says National Bank Financial (NBF) in a research note, adding that it agrees with that view.
“The current divergence between the trend in full-time job creation, housing starts and volume retail sales is most unusual. Whereas retail sales and home starts are up robustly, full-time employment is actually down from its year-ago level – thanks to a massive loss of 59,700 in July (as initially reported). We believe that this is where we might actually see a sizable revision that would bring the jobs data back in line with current consumption patterns,” it says. As a result, NBF expects the restated data to show a 30,000 employment gain in July.
CIBC World Markets says that it is also expecting an upward revision. It expected the numbers to show 20,000 in net new jobs last week, which it says would have been, “consistent with other signs that growth was firming up through Q2, and the dearth of jobs growth relative to GDP gains in recent months.”
However, it also cautions that “without any hints” from StatsCan about the nature of the mistake, it’s hard to make a reasonable estimate of the likely correction. “Bet on an upward revision, but don’t put too many chips on the table, since the market has appeared to already have priced in some of that good news in erasing a bit of Canadian dollar weakness when the story hit earlier this week,” it says.