Notes From the Desk: North American Employment Data – The Moderation Continues
North American employment data points to continued improvement in the supply-demand imbalance.
By The Numbers.
Canada
- 7k jobs created (20k expected) – the mix was good with 70.6k full-time jobs and a loss of 29.9k part-time jobs
- Unemployment rate meets consensus at 5.8%
- YoY wage growth moderates from 5.3% last month to 4.9% (5.1% expected)
US
- 275k jobs created (200k expected), but there were 167k downward revisions to the last two months of data
- Unemployment rate 3.9% (3.7% expected)
- YoY hourly earnings growth 4.3% (4.4% expected)
The implications.
The Bank of Canada ought to like signs that wage growth is moderating and that tepid employment growth continues as the path to lower inflation without a hard landing remains viable. Slowing wage growth keeps the rate cut door open, with a high possibility for the cutting cycle to begin in the summer (June).
The US labour market continues to gradually slow. The Federal Reserve (Fed) will be pleased to see job creation continue without putting undue upward pressure on wages. Today’s data supports Chairman Powell’s view that the Fed will lower rates later this year.
Bond traders are happy with today’s data and have pushed bond yields 2-5bps lower
