Wil Canada's Employment Provide Insight into US Jobs?

Tomorrow will be the seventh time this year that Canada reports its monthly employment data 90 minutes before the US releases its report.

In the past six times this year, the deviation of Canada's actual report from consensus identified the direction of the US miss four times. In Jan, Canada and US data were weaker than expected. February was one of the exceptions: Canada was stronger than expected while the US was weaker. In May, both Canada and the US data were stronger than expected. June was the other miss--Canada was stronger, but US was weaker relative to expectations. in Aug and Oct, Canada and the US reported less job growth than expected.

Admittedly this is a small sample size, which prevents bold conclusions. Given how much the two economies are integrated, there would seem to be some fundamental relationship between the relative performances. At the same time, the bulk of the employment is in the non-trade sector.

The consensus is for Canada to have created around 15k jobs in the month of October. Full time jobs could be double this and blunted in the headline number by a decline in part time work.

The market consensus is for about 60k rise in US non-farm payrolls. This could be the first increase since May. The ADP data, ISM reports, and the reduced layoffs picked up by Challenger and the decline in the weekly initial jobless claims during the week of the NFP survey warn of up side risks to jobs report.