CIBC Research discusses its reaction to today's US and Canada's jobs reports for the month of November.
"The Fed is looking for a cooling in the labor market in order to get inflation back to target, and the November employment data didn't deliver much on that front. Hiring was a robust 263K, above the 200K consensus expectation, even when accounting for a 23K negative revision to the prior two-month job tally. Also worrisome for the Fed was an acceleration in wage growth to 0.6% m/m (vs. 0.3% consensus), and an upward revision to the prior month (now 0.5% vs. 0.4% previously), which left the annual pace at 5.1% (vs. 4.6% consensus). There were a couple of pockets of weakness in the report, as the household survey showed a decline in employment for the second month in a row, but when combined with a drop in the participation rate, the unemployment rate was unchanged at 3.7%, as expected. Aggregate hours worked also fell by 0.2% m/m. Overall, this report is still consistent with a 50bp hike from the Fed in December," CIBC notes.
"After a roller coaster few months, the Canadian labour market moved sideways in November. The 10.1K job gain was in line with consensus expectations, as gains in full-time jobs were almost fully offset by losses in part-time employment. Employment increased in finance, real estate and manufacturing, but fell in construction, wholesale and retail trade. The unemployment rate ticked down to 5.1% as the labour force participation dropped by one tick to 64.8%. Wage growth of permanent employees also fell by one tick to 5.4%, as expected...However, given still strong wage growth, the composition of job gains in November (mainly private sector and full-time), and the low unemployment rate, this report supports our view that the Bank of Canada will increase rates by 50 bps next week, before pausing in 2023," CIBC adds.