Trump victory; what to expect on a labour market perspective

Putting aside our political convictions and preferences, the reality is that uncertainty is real and will last for a while.

It is not however a reason to panic; both Canada and the US are so intertwined that putting in place a 10% (or beyond) tariff for instance would be absolutely nonsensical, and erase value both sides of the border.

Having said that, Trump has proven himself relatively unpredictable in the past.

At this point, it is hard to know what of the promises from the Trump campaign will really happen and what was intended to be more of a bargaining chip. Besides, the race for the House has not concluded yet so the margin of maneuver and who will be named in key positions will probably also determine how key policies will be implemented and when.

Nonetheless, looking at this month’s manufacturing PMI, we have seen an expansion for the second month in a row (index above 50). But this expansion is seen mainly in companies serving the domestic market; it is likely that exporters are still holding their breath. And given the circumstances, they may do so for a while more which may somewhat slow down our recovery…

On the other hand though, with all the hurdles that putting tariffs will represent, it would surely take a year or so to be effective. If that’s the case, businesses could accelerate cross-border purchases to stock before tariffs come in. This would be somewhat positive for the economy at least on the short term…

In a nutshell, among things to expect on a labour market perspective: