More-complete Canadian employment survey shows Sept truly was strong but divergence continues

Big questions have circulated about accuracy of Canadian jobs data

On the first or second Friday of each month, Statistics Canada releases the Canadian jobs report, or Labour Force Survey. It"s a hugely market-moving data point for the Canadian dollar.

But over the past year it"s come under fire because of the unusual and consistent strength.

So economists have been taking a closer look at the "payroll employment, earnings and hours" report, which is released six weeks later but paints a more-complete picture. They have widely diverged in the past year, especially lately as the LFS has averaged 45K new jobs over the past three months in a very sluggish economy.

If we look at August, the LFS number was +26.2K. The more-complete payroll survey however showed August at -12.6K.

The good news is that the September numbers nearly matched. When the +67.2K print was initially released, the market scoffed. But the payroll survey showed 65.2K new jobs in the month.

Taking a step back, the highly-criticized LFS survey may even be understating the jobs market. In Sept, it showed employment up 139K but that compares to 217.1K in the payrolls data.

The large divergence is still troubling but even with problems in the Canadian energy sector, it"s clear that people are still hiring.

What"s troubling is the lack of pay raises. The earnings portion of the latest survey shows pay down 0.1% in September and up just 0.4% y/y.

More-complete Canadian employment survey shows Sept truly was strong but divergence continues
More-complete Canadian employment survey shows Sept truly was strong but divergence continues
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