A bank stock can react to Friday's jobs report long before a single borrower actually misses a payment. Markets are helpful that way. They like to panic about tomorrow's problem today. Statistics Canada releases September's Labour Force Survey on October 9. August employment fell by 42,000 while unemployment held at 6.4%, putting household finances squarely back under the microscope. For investors, though, the unemployment headline is only the beginning. Employment matters to banks in two ways. A strong labour market supports borrowing, spending and loan repayment. Yet it can also keep inflation firmer and reduce the case for lower interest rates. Weak employment can produce the opposite cocktail.
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