CIBC Research discusses its reaction to today's US NFP report for the month of January.

"The US labor market started the new year with a bang, as 517K jobs were created, well above the consensus expectation of 188K. A 71K upward revision to the prior two-month job tally added to the upside, and hiring was somewhat widespread across industries in January, with leisure and hospitality leading the way. The unemployment rate fell to 3.4% (vs. consensus for a tick increase to 3.6%), and the BLS noted that the introduction of new population controls to this month's data did not impact the overall unemployment rate. Average wages rose by a moderate 0.3% m/m, as expected, and a more modest 0.2% for production workers," CIBC notes. 

"Overall, this is clearly a tight labor market that proves that the Fed has more work to do in order to cool activity," CIBC adds.