CIBC Research discusses its reaction to today's US and Canada jobs reports for the month of April.

"The US labor market heated up in April, as hiring accelerated to 253K (vs. 185K consensus), although there was a downward revision to the prior two month job total (-149K), which erased the upside surprise. Business services, health/social assistance, and leisure and hospitality led the job gains, while employment in goods-producing sectors rebounded following a drop in March. The 0.5% advance in wages (vs. 0.3% expected), and the one tick decline in the unemployment rate to 3.4% (vs. expectations for a tick increase to 3.6%) will dampen market enthusiasm for bets on rate cuts coming soon," CIBC notes. 

"The Canadian labour market remained strong in April, with employment rising more than expected, the unemployment rate remaining near all time lows and wage inflation failing to decelerate. The 41K gain in jobs during April was double the 20K expected by the consensus, although the quality wasn't quite as good as in prior months with all of the gain coming in part-time work (+48K). Overall, even though today's increase in employment was fairly narrowly based and driven by part-time work, the labour market is clearly stronger and tighter than we would have expected given signs of deceleration in economic growth to end Q1, which supports the continued hawkish tone from the Bank of Canada," CIBC adds.