The U.S. economy added 148,000 jobs in December, almost all of them in the private sector (Previous +239k vs. +193k e).
- The U.S. service sector deeply hit.
- Well below the 2017 monthly average of +171k jobs added but is enough to keep up with population growth and chip away at unemployment.
- The labor-force participation didn’t budge in 2017 despite the +2m jobs added. Participation rate stands at +62.7% in December.
- The average hourly paycheque for private sector workers grew +2.5% in 2017. That suggests the labor market still has some slack despite the low unemployment.
- Hourly wages grew +9c , or +0.34%, in December from a month earlier.
- U.S. yield curve 2/10 see a ‘bull’ flatter being priced in at +49 bps
Market reaction sell the USD (€1.2059, £1.3564, ¥113.34) and buy U.S. treasuries.
Canadian Job Numbers Explode
- Canada’s unemployment rate dropped to a four-decade low in December and job creation exceeded expectations for a second consecutive month.
- The Canadian economy added a net 78,600 jobs in December vs. market expectations of 2,000.
- Canada’s jobless rate records a new low of +5.7%, down from 5.9% m/m – the lowest unemployment rate in four decades. Expectations were looking for the jobless rate to tick up to +6%.
- 2017 was the best year for Canadian job growth since 2002.
- Full-time employment change: +23,700 vs +29,600 prior – Part-time employment change: +54,900 vs. +49,900 prior
- Participation rate: 65.8% v 65.7% prior
This morning’s strong data would likely increasing pressure on the Bank of Canada (BoC) to hike interest rates much sooner than the market has being calculating. Odds for a January hike next week are currently trading at +50%.
The CAD is up +0.88% at C$1.2369
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