By James Langton

(June 30 – 17:00 ET) – While the veracity of the U.S. slowdown is critical to the Canadian outlook, the only homegrown number that economists are looking forward to is next Friday’s employment report. U.S. jobs data will be out on the same day, too.

CIBC World Markets expects the Canadian economy to have generated 32,000 net new jobs in June, down from 42,000 in May. However, it expects to see the unemployment rate edge up to 6.7% with more people looking for work. BMO Nesbitt Burns predicts only 20,000 new jobs, with the jobless rate staying at 6.6%. The consensus call is about 25,000.

CIBC analysts expect strong job growth in June is consistent with the idea that earlier weakness was temporary. Nevertheless, they expect minimal market impact.

RBC DS Global Markets expects to see slower U.S. growth carry through to the second half due to higher interest rates, higher oil prices, and sluggish equity prices. “With the economy seemingly operating at or below full employment, there are few risks that core inflation will rise back to 2% anytime soon,” it says, calling for the Bank of Canada to stay on the sidelines, even if the Fed boosts rates 25 basis points in August as expected.

As for the U.S. picture, analysts at First Call aren’t expecting much out of the week. Research director Chuck Hill calls it “the calm before the storm. It would be better to take off this week rather than the next three.”

Many in the industry are looking at next week as a write-off with Independence Day falling on Tuesday, many U.S. traders will skip Monday as well. Canadian markets are closed for Canada Day anyway.

On the other hand, the U.S. national purchasing managers index will be released on Monday. Economists at RBC DS Global Markets are keying on the NAPM looking for signs confirming the U.S. slowdown.

On Thursday, the U.S. manufacturing orders and the non-manufacturing purchasing managers index will be reported. Friday brings the all-important U.S. jobs report, with both the Fed and rate watchers keying on the labour market as a sign of inflationary pressures in the economy.