Notes From the Desk: Today’s Employment Data – Sealing the Deal
Canadian and US employment data for June was released this morning, confirming the resiliency of labour markets despite higher interest rates.
By the numbers.
Canada
- 59.9k jobs created (20k expected).
- Strong mix, with 109.6k full-time jobs, gained while 49.7k part-time positions were lost.
- Unemployment rate 5.4% (5.3% expected).
- YoY wage growth 3.9% (4.3% expected).
US
- 209k jobs created (230k expected).
- Unemployment rate 3.6% (meeting forecasts).
- YoY wage growth 4.4% (4.2% expected).
The implications.
In Canada, we had more jobs with less pay, while in the US, we had fewer jobs with more pay.
- The Bank of Canada will likely view slower wage growth and a higher unemployment rate as a sign that the labour market is becoming more balanced. However, the data is still strong enough for the Bank to deliver a 25bps hike this month. In terms of bond yields, we should see them move higher as the market prices in the possibility of another 25bps hike coming in September.
- The Federal Reserve has already signalled that at least two more rate hikes are coming. Today’s data does nothing to reduce the odds of this and solidifies a 25bps hike at the end of the month.
