Synopsis:

CIBC analyzes the US and Canadian August jobs reports, noting a cooling labor market in the US and a mixed performance in Canada. The reports highlight different trends in employment growth, wage increases, and unemployment rates, influencing the outlook for future monetary policy.

Key Points:

US Jobs Report:

• Employment Growth: Increased by 142k, falling short of the 165k forecast. July payroll gains were revised down to 89k.
• Three-Month Average: Payroll gains averaged 116k, slightly above long-run break-even estimates.
• Unemployment Rate: Fell to 4.2%, in line with expectations.
• Participation Rate: Stable at 62.7%, with strong prime-age participation at 83.9%.
• Wage Growth: Rose by 0.4% m/m, exceeding expectations.

Canada Jobs Report:

• Employment Change: Rose by 22k, close to the forecast but primarily in part-time jobs (+65k), with full-time positions declining.
• Jobless Rate: Increased to 6.6%, higher than the 6.5% forecast due to a larger rise in the labor force (83k).
• Hourly Wages: Increased by 4.9% YoY, showing deceleration but remaining high. Other wage measures also indicate broader deceleration.

Conclusion:

The US jobs report presents a mixed picture with slower employment growth and rising wages, creating uncertainty for the Fed's future policy decisions. In Canada, a softer job market and rising unemployment suggest continued steady interest rate cuts by the Bank of Canada. Both reports underscore the need for careful monitoring of labor market trends and their implications for monetary policy.