By James Langton
(September 7 – 18:00 ET) – This week, economics watchers are focused on Friday, Sept 10. That’s when Statistics Canada will release Canadian jobs numbers. Also on Friday, the latest Producer Price Index data will be released in the U.S.
The market is looking for 30,000 new jobs created, keeping the unemployment rate stable at 7.7%. Economists at CIBC World Markets Inc. are expecting just 20,000 new jobs, with the unemployment rate climbing to 7.8%, thanks to an increase in job seekers.
But over at RBC Dominion Securities Inc., analysts are expecting a report of 35,000 new jobs, with the unemployment rate slipping to 7.5%. DS admits it is getting mixed signals on the jobs front. A higher help-wanted index and longer work week point to gains. But those gains are offset by fewer overtime hours worked.
The big inflation number for the U.S. this week is the PPI. The market is expecting a 0.3% increase, or 0.1% excluding food and energy. CIBC is on the bullish side, anticipating a 0.2% increase on the headline and an unchanged core number. It says that even with oil prices, the inflation picture in the U.S. appears “constructive.” But it expects oil to weaken as OPEC members begin cheating on their production limits.
If CIBC is right, it expects the bond and stock markets to follow through strongly. It believes the U.S. Federal Reserve Board would have no compelling reason to raise interest rates.