By Samuel Indyk
Investing.com – The United States created 49,000 jobs in January while its neighbour to the north shed 213,000. The US figure was almost exactly in {{0|line} } with expectations with markets forecasting 50,000 jobs created, although the range of estimates was from -200,000 to +400,000.
US
The unemployment rate in the United States fell to 6.3%, the lowest level since May last year when it spiked up above 14%. The, perhaps more accurate, U6 measure (which includes people marginally attached to the labour force) fell to 11.1% but remains above pre-pandemic levels.
Average hourly earnings have been distorted by the types of jobs lost in the labour market. A decrease in lower-paid employment in the hospitality and travel & leisure has seen average hourly earnings increase markedly from the same period a year ago. In January, average hourly earnings were up 5.4% YoY.
The market reaction has been relatively muted given that the headline was broadly in line with expectations. S&P 500 Futures trade back at pre-announcement levels after a brief dip. However, the Dollar Index fell to fresh session lows with GBP/USD at its highest level of the day. Part of the USD weakness has been attributed to the downward revision of December's payrolls data. Previously it was thought the US economy lost 140,000 jobs in December but this number was revised to a greater number, with the economy shedding 227,000 during the month. Separately, markets had been primed for a beat given the improving initial jobless claims data and strong employment components from the ISM manufacturing and non-manufacturing surveys.
Canada
On the face of it, the Canadian jobs report looks terrible. The economy lost 213,000 employees in the month of January, the unemployment rate increased to 9.4% and the participation rate fell to 64.7%. However, the majority of lost jobs were part-time employees and the country actually created almost 13,000 full-time jobs in the month. The initial kneejerk reaction saw weakness in CAD with USD/CAD testing earlier highs, however, the move was quickly pared amid broad USD selling.