U.S. adds 49k jobs in January, Canada loses 213k
The unemployment rate in the United States fell to 6.3%, the lowest level since May last year when it created 49,000 jobs in January (over 14% spike in employment) while Canada shed 213,000 Jobs .
Down to how it affects the market. The market reaction remained relatively unchanged as investors and other market participants expectations were met. That is, investors expected the spike in employment rate in the U.S.
The S&P 500 Futures trade back at pre-announcement levels after a brief dip. However, the Dollar Index fell to fresh session lows with GBP/USD at its highest level of the day. Part of the USD weakness has been attributed to the downward revision of December’s payrolls data.
Now to the U.S neighbour, Canada, about 213,000 jobs were lost in January. Though this report looks terrible on the face of it, it’s not as bad as it seems when an in depth analysis of the employment data is done. The majority of lost jobs were part time employees. Canada actually created almost 13,000 full time jobs in January.
The initial market reaction saw weakness in CAD with USD/CAD testing earlier highs, however, the move was quickly corrected amid broad USD selling.
Despite this increase in employment rate, the nation is still struggling to recover from the blow it received due to the pandemic. The weak employment growth reported added fuel to the Democratic demands for another large dose of federal aid to help the economy.