07:54 AM EDT, 10/07/2024 (MT Newswires) -- After last week's "blowout" United States jobs report, all eyes will be on September employment figures in Canada, said Bank of Montreal (BMO).

The report comes out on Friday and the bank noted that employment is expected to rise a "moderate" 20,000 in the month, somewhat below the 26,000 average seen over the past year. BMO knows that the Labour Force Survey (LFS) can throw out volatile results and keeps in mind that two of the past three months posted negative prints.

While the bank is assuming some bounceback, another such result would really stoke downside concerns. To this point, much of the softening has come on the supply side, with near-3% year-over-year labor force growth simply not getting absorbed fast enough, leading to a 1.8 ppts increase in the unemployment rate from the cycle low.

BMO estimates another one-tick increase in the unemployment rate, to 6.7%, in September. The demand side has softened as well, with hiring slowing and job openings falling steadily, but it hasn't broken to the extent that you would see in a typical downturn.

Also on Friday, BMO will look for the Bank of Canada's Business Outlook Survey and Survey of Consumer Expectations for Q3. The reports should underscore a weakening economy, though short-term inflation expectations may stay sticky.

On Tuesday, the bank will look for the merchandise trade account to swing into a deficit in August from a modest surplus in the previous month. Lower energy prices will pressure the value of energy exports, while a negative manufacturing flash points to declines in imports and non-energy exports.

Looking ahead, the jump in oil prices -- if sustained -- should support an improvement in the trade balance for October, stated BMO. Over the medium term, lower interest rates look to drive a recovery in broader trade activity.