Today's payroll report extended trend of softness
Canada has two jobs reports.
There's the household survey, which is released a few days after the end of each month and gets all the attention. Then there's the payroll survey which is released nearly two months after month-end and is largely ignored.
Generally they tell the same story but occasionally they diverge.
However the second report is a better metric because it's based on payroll data and a survey of employers.
The divergence is especially notable right now. In September the household survey showed the economy adding 54,000 jobs. Today's establishment survey showed it losing 27,600 jobs. Moreover, while the household survey surged from July, the establishment survey has sagged. Year-to-date there's now a 114K jobs gap.
Normally I'm inclined to believe the truth is somewhere in the middle but this time I lean towards the establishment survey because economies have been slowing everywhere since June and there's no reason to believe Canada is some big outlier.
Eventually, Statistics Canada is going to discover those 114K jobs aren't there and it will weigh on the main jobs report and likely push up unemployment. Expect that to be a CAD headwind in the months ahead.
That said, I like the loonie for 2020, I just don't think you want to hold it on jobs day.
