Canada’s labour market in focus

Happy Friday.

• The Canadian economy shed 30,000 jobs last month, countering expectations for a gain of 6,000 jobs and driving the unemployment rate up to 7.3 percent from 7.2 percent. The story is not the headline, however, but in the details and the broader context. All of the jobs losses were in part-time service positions -- 51,600 -- compared with a gain in full-time jobs of 21,300. One of the most interesting details is the fact that of all provinces, Quebec shed the most jobs: 29,000. Yesterday on Market Sense, PIMCO’s Ed Devlin said there could be significant country risk for Canada depending on the outcome of Quebec’s election next month. It stands to reason both the Parti Quebecois and Coalition Avenir Quebec will use today’s data in their campaigning against Charest’s Liberals. According to the latest La Presse poll, the PQ had 32 percent support, Liberals had 29 percent, CAQ had 21 percent. I’d like to see more discussion today about what’s at stake for Quebec and Canada’s economies in the upcoming election.

• Another key number is released at 8:30 a.m.: the U.S. Department of Agriculture’s domestic crop forecast. World food prices jumped 6.2 percent last month, the biggest single-month gain since November of 2009, as the worst U.S. drought since 1956 withers crops across the Midwest. The situation has grown so dire that the UN is now urging the U.S. to cut ethanol production, saying the country is turning much-needed food into fuel. Corn climbed to a record high $8.30 US a bushel this morning, giving it a gain of 40 percent so far this year. Soybeans are up 36 percent and wheat is up 27 percent. These price surges will have long-term affects on the prices consumers and investors pay for everything from bread to bacon to sirloin to fertilizer stocks and Deere tractors and combines. The USDA will probably slash its 2012 corn-crop forecast to 10.929 billion bushels, the smallest in six years and 16 percent below its July forecast, according to a Bloomberg survey. The estimate for soybeans may drop 8.3 percent to 2.796 billion bushels, the lowest since 2007.

• There are a plethora of compelling stock stories today, including but not limited to Penn West Petroleum, which cuts its production forecasts and said it is looking to sell up to $1.5 billion in so-called non-core assets. Sticking with the patch, Calfrac reported a bigger than expected loss,

• In the U.S., J.C. Penney reported a bigger loss than expected and said same-store sales in the second-quarter plunged 22 percent while overall sales sunk 23 percent. Ron Johnson, the new CEO who joined in November after running the retail division of Apple, has so far failed to revive the fortunes of the department store, raising questions about his pricing strategy.

• Monster Beverage, which took a drubbing yesterday after missing profit and revenue expectations, may be in for another tough session after the company disclosed after the close of trading that it is being investigated by an unidentified attorney general over the company’s flagship drink and the ingredients.

• We are also watching the shares of Magna after the company reported after the close of trading last night, and Silver Wheaton, too.

• The backdrop as we head towards the North American open has been painted by China, which said overnight that export growth collapsed to 1 percent in July compared with a rate of 11.3 percent in June. New loans in yuan also fell below expectations in the month, underscoring concern about the pace of the overall economy and raising expectations that monetary and fiscal authorities may move to spark the economy.

• Manchester United begins trading on the NYSE today after the soccer club sold shares to the public at $14 each, below the $16-$20 range the owners were hoping for. Hala Madrid! Hala Madrid! Noble y belico adalid! (the Real Madrid chant).

Every morning Managing Editor Marty Cej writes a "chase note" to BNN's editorial staff listing the stories and events that will be in the spotlight that day. Click here to have it delivered to your inbox before the trading day begins.