07:15 AM EST, 11/05/2024 (MT Newswires) -- Canada will release the October Labour Force Survey (LFS)on Friday, at 8:30 a.m. ET.

S&P Global Ratings said it expects that Canadian payrolls added close to 15,000 jobs in October after adding 47,000 jobs in September and 22,000 in August. An average of 22,000 jobs were added each month in Q3, down from the 39,000 average in the Q2 and 25,000 average in Q1.

This suggests the Canadian labor market has been softening while economic activity has remained weak -- despite the fact that the country's central bank has lowered interest rates by a total of 125bps since June, noted S&P Global.

S&P Global stated it expects the unemployment rate to inch up to 6.6% in October while it had edged lower, to 6.5%, in the previous month.

Canada's labor market has shown signs of cooling: The unemployment rate is elevated, and the job openings rate has already dropped below pre-pandemic levels. Hiring has remained soft, according to the Bank of Canada's latest business outlook survey (BOD). That survey also pointed to a weak sales outlook for the next 12 months.

S&P Global estimated that the unemployment rate to remain elevated (at 6.5%-6.7%) through the end of the year, and it predicted it to trend lower after that as the hiring rate picks up -- more than labor supply growth.

Underlying economic conditions remain muted and disinflationary pressures continue, so SP& Global forecasts Canada's central bank to boost economic growth by frontloading its policy normalization stance. It expects another 50bps rate cut at BoC's December policy meeting.