06:49 AM EDT, 10/07/2024 (MT Newswires) -- The September Labour Force Survey (LFS) will be closely watched for signs of more economic weakness as the Bank of Canada considers whether to accelerate the pace of interest rate cuts, said RBC.

Canada will release September's LFS on Friday, at 8:30 a.m. ET.

The bank noted it expects the Canadian unemployment rate ticked up again to 6.7% in September from 6.6% in August. That's 1.1 percentage points higher than a year ago and 1.9 percentage points above the lows after the pandemic.

Much of the increase in unemployment has come from longer job search times, particularly for students entering the job market, rather than layoffs, pointed out RBC. Employment has continued to rise gradually, but not fast enough to keep up with rapid population and labor force growth.

RBC predicts that trend to continue in September with 15,000 jobs added, a modest slowing from 22,000 in August.

However, near-term risks remain for larger increases in unemployment. Job vacancies have continued to decline at a rapid pace -- down more than 25% from a year ago -- with early indicators such as job postings on indeed.com flagging that those declines continued into September. Wage growth has held up, but should continue to slow as hiring demand continues to cool, added the bank.