The week ahead promises to be an important one for economy watchers of both sides of the border, with some significant data releases on tap.

The focus in Canada will likely be Friday’s October labour force survey. RBC Financial says that, after contracting in previous months, there was a strong surge in September employment figures with 46,000 new jobs, so, “markets will be keenly watching for signs as to whether or not improving labour markets have staying power.”

BMO Nesbitt Burns says that it is looking for a cooling off in October to a rise of 12,000. “Manufacturing is expected to be a major sore point, but other sectors have probably stepped into the void, with strength in construction, public administration, health care, and finance/real estate. This rise should be just enough to keep the jobless rate steady at 8%.”

“There are risks of a weaker than consensus report if we manage to catch the first wave of cost-cutting layoffs in response to the challenge of operating with a stronger dollar,” says CIBC World Markets.

CIBC notes that this is the last piece of evidence that the Bank of Canada will have on the labor market ahead of its December rate setting date. “After the upside gains in US GDP, its going to take a very weak number to keep alive any hopes for a rate cut before year end,” it says.

RBC suggests that Tuesday is the only other significant day for economic releases in Canada, with the October version of the business conditions survey for manufacturing industries, and data on residential and commercial building permits issued in September. But market watchers will also undoubtedly pay attention to Monday’s federal economic update.

Nesbitt says that the economic portion of the update is unlikely to produce much of a surprise, but it hopes that the fiscal outlook will be a little more interesting. “While many are probably growing tired of Ottawa crying wolf on its fiscal position, the federal government will likely see its surplus dip to around the $3 billion range this year. For FY04/05, it will be interesting to see if Ottawa adjusts the $5 billion set aside for a contingency reserve and an economic cushion,” it says.

CIBC isn’t convinced that this report will produce much. It says, “Don’t look for the Ottawa’s fiscal update to be very revealing, with the Liberal government likely to keep its thinking close to the vest ahead of a change at the top.”

Meanwhile, in the U.S., RBC reports that next week will be another very busy one by way of scheduled releases. “Monday kicks off the week with the ISM manufacturing survey and auto sales in October, plus construction spending in September. September factory orders and October’s non-manufacturing ISM survey will be released on Wednesday. Updates on weekly initial unemployment claims and third quarter productivity estimates are due out on Thursday. In addition to employment figures, Friday also brings with it an update on September’s wholesale trade activity,” it says.

“After very impressive third quarter growth numbers, a few of next week’s indicators will help to determine to what extent the momentum is carrying over into the fourth quarter as widely expected.”

Nesbitt agrees that this could be an important week for the U.S. economy, saying, “The upcoming week might prove critical to the process of expectations formation in U.S. markets. The widely held belief that the recovery was fragile and likely to give way to deflationary stagnation in 2004 has been severely shaken.”

CIBC says that the ISM will likely show continued growth, but it only sees net hiring of 40,000, affected by a west coast supermarket strike. “Markets will continue to keep a very close eye on weekly jobless claims, which at current levels, have been consistent with an unimpressive 50,000 to 100,000 new hires per month..”

“The message emerging from the week may be clear. The U.S. economy might finally be firing on all cylinders. If so, how long to the first Fed tightening?” Nesbitt asks.

As for earnings, the flow slows, but there are still some big names on the schedule. Premium Brands Inc. reports on Monday, along with Four Seasons Hotels Inc.

CanWest Global Communications Corp. goes on Tuesday, joined by Glamis Gold and Industrial-Alliance Insurance.

Wednesday brings CAE Inc., Shoppers Drug Mart and Terasen Inc.