Economy watchers will zero in on unemployment this week as they hunt for more clues about the uncertain direction of the Canadian, U.S. and key euro-zone economies.
The big question in Canada is how much damage is being wrought in the broader economy by the steep slide in oil prices and the accompanying rapid decline in investment. In the United States, analysts will be looking for evidence that the economy's stumble into negative territory in the first quarter was a weather-related fluke rather than the beginning of the end for the still fragile recovery.
Across the pond, analysts will settle for any signal that the troubled euro-zone job market is at least stabilizing, as the European Central Bank continues its unprecedented bond-buying spree in an effort to stave off deflation and kick-start some job-creating investment.
Monthly job numbers tend to be untrustworthy gauges of economic health or even that of the labour market itself. They are typically subject to revision and leave wide latitude for interpretation. But that won't keep analysts from carefully dissecting Canada's latest Labour Force Survey or the U.S. non-farm payroll number when both are released Friday. They are likely to show that the two economies are on divergent paths.
The job picture in Canada grows murkier as the oil implosion begins to take a toll not only on various oil sands, pipeline and other energy-related investments but also on a raft of activities tailored to meet the energy sector's once voracious appetite for everything from materials and equipment to commercial real estate and financial services.
Meanwhile, offsetting economic benefits stemming from a stronger U.S. market and a weaker loonie won't improve Canadian job prospects in the immediate future.
"The trend is likely going to still be weak. I don't see any signs of meaningful improvement just yet," Bank of Montreal senior economist Benjamin Reitzes said.
The consensus forecast is for a modest increase of 10,000 jobs in May, after a decline the previous month, while unemployment holds steady at 6.8 per cent.
The oil fallout didn't show up in the first-quarter job numbers, but will soon be making an unwelcome guest appearance.
"I wouldn't be surprised if we saw some weakness on that front in May," Mr. Reitzes said. "The rest of the country will probably do a bit better [than Alberta], but overall it's still a relatively soft job market."
The U.S. employment outlook, by contrast, is much sunnier, despite a worse than expected first-quarter decline in GDP of 0.7 per cent.
The consensus call is for a substantial gain in May of more than 200,000 jobs, which would mark the 14th time in the past 15 months the U.S. economy has delivered at least 200,000 new jobs. The March figure of 85,000 was the exception. Canada has posted employment declines in eight of the past 17 months.
The "solid [U.S.] job creation should continue to tighten the labour market," Geoffrey Somes, senior economist with State Street Global Advisors in Boston, said in a note.
The U.S. jobless rate improved to a seven-year low of 5.4 per cent in April, edging closer to the level of about 5 per cent treated by the Federal Reserve as effectively full employment.
The tightening job market, coupled with rising confidence among small-business operators, supports the view that, despite falling corporate profits, the U.S. economy is back on the recovery track after being derailed in the first quarter.
The same can't be said for the euro zone, where unemployment is forecast to hold steady at 11.3 per cent. But in the battered currency union, stabilization counts as an improvement. And there are other shafts of light in the form of greater business confidence and a steadily improving economy in Spain, where first-quarter growth of 0.9 per cent was the highest since late 2007.
Grouchy consumers in the region aren't exactly brimming with confidence, but they appear to be a tad less miserable. In Europe these days, with growth feeble, the jobless rate high and a potential Greek default looming, that's considered a positive.