CIBC Research discusses its reaction to today's US and Canadian jobs reports for the month of December.
'The rise in virus cases started to catch up with the US labor market in November, as hiring slowed to a fraction of the pace seen in previous months. The 245K jobs created were well below the consensus forecast for a 460K gain and included slower hiring across most industries, notably leisure & hospitality, and a drop in retail trade as hiring failed to keep up with normal seasonal patterns.
With the virus still spreading rapidly, December could be a more challenging month for the labor market, as some states are contemplating increasing restrictions on activity. This coincides with the expiration of a couple of federal unemployment benefit programs at the end of the year, suggesting that further fiscal support is becoming increasingly urgent," CIBC notes.
"Canada's labour market was able to outrun Covid again in November. The economy added 62K jobs, taking the unemployment rate all the way down to 8.4%. The increase of 0.3% in employment was the slowest monthly advance since the recovery began, with additional restrictions in recent months weighing on hiring in some industries.
The survey was conducted towards the middle of November, which was before the latest rounds of more-severe shutdowns in parts of the country. As a result, it's likely that Covid will catch up with the Canadian economy in the December data, with a decline expected in both employment and overall economic activity," CIBC adds.