8th March2024
Friday
Canada and the United States will unveil keyeconomic data on February 8th, with Canada releasing its Employment Change andUnemployment Rate, and the US announcing its Average Hourly Earnings, Non-FarmEmployment Change, and Unemployment Rate. This data is expected to attractsignificant market attention and offer valuable insights into the health of theNorth American economies.
CAD - Employment Change
Employment change, a key economic indicatorreleased monthly about eight days after the previous month's end, measures thenet change in the number of employed people. Its significance lies in itsability to predict consumer spending, a vital component of economic activity,making it impactful for financial markets.
In January, Canada's labor market witnessed apromising increase with the addition of 37,000 jobs, surpassing the stagnantgrowth observed over the previous three months. This surge outstripped both therevised December gain of 12,300 jobs and the anticipated 16,000, signaling arobust start to the year. Despite this positive trend, the overall employmentrate experienced a slight decline to 61.6%, as the rise in the populationmarginally outpaced job creation. Meanwhile, the unemployment rate decreased to5.7%, marking its first decline since December of the previous year.
Notably, employment saw substantial increases inseveral provinces: Ontario led with 24,000 new jobs, followed by Newfoundlandand Labrador with 7,500, Manitoba with 6,900, and Nova Scotia with 3,700.However, Saskatchewan bucked the trend with a decrease of 6,200 jobs. Theservices-producing sector, particularly wholesale and retail trade which added31,000 jobs, and finance, insurance, real estate, rental, and leasing with a28,000 job increase, drove much of the employment growth. Conversely, theaccommodation and food services sector faced a downturn, losing 30,000 jobs.Additionally, the report highlighted a 1.1% year-over-year increase in totalhours worked and a 5.3% rise in average hourly wages. The participation rateslightly fell to 65.3%, amidst a stable labor force and a growing population.This summary captures the key dynamics in Canada's labor market, emphasizingsignificant provincial contributions and sectoral shifts.
TL;DR
Metric
Value
Details/Notes
1 Total Jobs Added (January)
37,000
Surpassing the previous months and expectations
2 December Job Gains (Revised)
12,300
Previous month's figure for comparison
3 Unemployment Rate
5.7%
Decreased, marking the first decline since last December
4 Employment Rate
61.6%
Slight decline due to population growth outpacing job creation
5 Provincial Job Gains
- Ontario: 24,000<br>- Newfoundland and Labrador: 7,500<br>- Manitoba: 6,900<br>- Nova Scotia: 3,700
6 Provincial Job Losses
Saskatchewan: 6,200
7 Leading Sectors for Job Gains
Wholesale and Retail Trade: 31,000 jobs - Finance, Insurance, Real Estate, Rental, and Leasing: 28,000 jobs
8 Sector Facing Job Losses
Accommodation and Food Services: 30,000 jobs
9 Year-over-Year Total Hours Worked Growth
1.1%
Indicates an increase in total hours worked over the year
10 Average Hourly Wages Growth
5.3%
Year-over-year increase in wages
11 Labor Force Participation Rate
65.3%
Slight decrease amid stable labor force and population growth
The forecast for the upcoming Employment Change data is expected to be 20,000.
The upcoming Employment Change data release is scheduled for Friday at 1:30 PM GMT.
The last time, the CanadianEmployment Change data was announced on the 9th of February,2024. You may find the market reaction chart (USDCAD M5) below:
CAD - UnemploymentRate
The unemployment rate, reflecting the percentage ofthe workforce actively seeking employment but currently jobless during theprior month, is released monthly, approximately eight days after the monthconcludes. Although considered a lagging indicator, it remains a significantsignal of overall economic well-being due to the strong correlation betweenconsumer spending and labor market conditions.
In January 2024, Canada's unemployment ratedecreased to 5.7%, a drop from the 22-month peak of 5.8% seen in December,surpassing forecasts that anticipated a rise to 5.9%. This downturn, the firstin over a year, alleviated concerns about the detrimental effects of highinterest rates on the Canadian economy, providing the Bank of Canada with moreflexibility to keep interest rates at elevated levels for an extended period.The number of unemployed individuals declined by 19,200 to 1,243,800, mainlydue to a significant decrease of 18,800 in youth unemployment. Moreover, theCanadian economy saw the addition of 37,300 jobs, the largest increase in fourmonths and significantly exceeding the anticipated 15,000 job growth.Meanwhile, the labor force participation rate dipped by 0.2 percentage pointsto 65.3%, even as the labor force remained largely stable, attributed to anincrease in the population aged 15 and above.
TL;DR
Metric
Value
Details/Notes
1 Unemployment Rate
5.7%
Decreased from December's 22-month peak of 5.8%
2 Forecasted Unemployment Rate
5.9%
Actual rate was lower than anticipated
3 Number of Unemployed Individuals
1,243,800
Decreased by 19,200 from the previous month
4 Youth Unemployment Decrease
18,800
Significant factor in the overall unemployment rate decrease
5 Total Jobs Added
37,300
Largest increase in four months, surpassing the expected 15,000
6 Labor Force Participation Rate
65.3%
Decrease of 0.2 percentage points, with a stable labor force
7 Impact on Economic Policy
Provides Bank of Canada flexibility to maintain high interest rates
The CanadianUnemployment Rate is expected to rise to 5.8%, marking an increasefrom the previous rate of 5.7%.
The upcoming UnemploymentRate release is scheduled for Friday at 1:30 PM GMT.
The last time, Canadian Unemployment Rate was announced on the 9thof February, 2024. You may find the market reaction chart (USDCAD M5) below:
USD - Average HourlyEarnings m/m
The Average Hourly Earnings m/m data, releasedmonthly on the first Friday following the month's end, measures the change inwage rates paid by businesses, excluding agriculture. This data serves as theearliest indicator of labor inflation, as rising wages often precede increasesin consumer prices. Notably, the source series calculation formula underwent anadjustment in February 2010. This detail is crucial for ensuring accuratehistorical comparisons and proper interpretation of trends.
In January 2024, US private nonfarm payrollemployees experienced a notable increase in average hourly earnings, climbing19 cents or 0.6% to reach $34.55, surpassing the expected 0.3% rise and markingthe most substantial increase since March 2022. Over the last year, theseearnings have seen a 4.5% uptick. Additionally, the wages for private-sectorproduction and nonsupervisory employees also went up by 13 cents or 0.4%,settling at $29.66 in January, indicating a positive trend in wage growthacross the board.
TL;DR
Metric
Value
Details/Notes
1 Average Hourly Earnings Increase (Private Nonfarm Payroll Employees)
0.6% (19 cents)
Increased to $34.55, surpassing the expected 0.3% rise
2 Year-over-Year Earnings Growth
4.5%
Indicates significant earnings growth over the last year
3 Average Hourly Earnings Increase (Private-Sector Production and Nonsupervisory Employees)
0.4% (13 cents)
Increased to $29.66, showing a positive trend in wage growth
Analysts arecurrently forecasting a decrease in Average Hourly Earnings m/m to 0.3%,down from the previous reading of 0.6%.
The upcomingrelease of Average Hourly Earnings m/m data is scheduled for Fridayat 1:30 PM GMT.
The lasttime, the US Average Hourly Earnings m/mwas announced on the 2nd of February, 2024. You may find the marketreaction chart (XAUUSD M5) below:
USD - Non-FarmEmployment Change
Traders pay close attention to the Non-FarmEmployment Change Measures as they provide crucial data on the change inemployed individuals from the previous month, excluding the farming sector.This information is released monthly, typically on the first Friday followingthe month's end. Its significance lies in its role as a leading indicator ofconsumer spending, which drives a substantial portion of overall economicactivity.
In an unexpected boost to the U.S. economy, January2024 saw a remarkable increase in employment, with 353,000 new jobs addedacross various sectors, significantly outpacing the anticipated 187,000. Thissurge, the most substantial in the past year, underscores the strength andtightness of the labor market.
The professional and business services, healthcare,retail trade, and government sectors led the charge, each posting significantgains and reflecting the broad-based nature of the job market's strength.Despite the overall positive trend, the mining and extraction sectorexperienced a slight downturn, marking one of the few areas not to share in thejob growth.
Further bolstering confidence in the job market'srobustness, the Bureau of Labor Statistics' annual revisions presented an evenbrighter picture for 2023. The revised data revealed an average monthly jobgrowth of 255,000, adjusting previous figures upward and highlighting theeconomy's resilience.
This latest report not only signifies a strong startto 2024 but also signals continued momentum in the U.S. economy, with diversesectoral growth contributing to an optimistic outlook.
TL;DR
Metric
Value
Details/Notes
1 Total Jobs Added
353,000
Far exceeding the anticipated 187,000
2 Leading Sectors for Job Gains
-
Professional and Business Services - Healthcare - Retail Trade - Government
3 Sector with Job Losses
Mining and Extraction
Marking a slight downturn amid overall growth
4 BLS Annual Revisions (2023)
255,000/month
Average monthly job growth, revised figures showing stronger resilience
5 Overall Impact
-
Highlights a strong, diverse, and tight U.S. labor market
Market expectations are currently indicating asignificant decline in Non-Farm Employment Change, dropping to 190,000,compared to the previous strong reading of 353,000.
The next Non–Farm Employment Change is setto be released on Friday at 1:30 PM GMT.
The last time, the USNon-Farm Employment Change was announced on the 2nd of February,2024. You may find the market reaction chart (XAUUSD M5) below:
USD - UnemploymentRate
The unemployment rate, a key indicator releasedmonthly around eight days after the prior month's end, reflects the percentageof the workforce actively seeking employment but currently unemployed. Whileconsidered a lagging indicator, it remains a significant signal of overalleconomic health due to the strong correlation between consumer spending andlabor market conditions. Additionally, the unemployment rate is a major factorconsidered by policymakers when formulating the country's monetary policy.
The U.S. job market showcased resilience in January2024, with the unemployment rate holding firm at 3.7%, reflecting steadinessfrom the previous month and slightly bettering expectations of a 3.8% figure.The labor force participation rate, an indicator of the active portion of theworkforce, also remained unchanged at 62.5%, a figure not seen since Februaryof the previous year.
In a sign of the job market's underlying stability,the total number of unemployed Americans fell by 144,000 to 6.12 million,suggesting some positive shifts beneath the surface. On the flip side, theemployed segment of the population saw a minor dip, decreasing by 31,000 to atotal of 161.15 million.
This latest data paints a picture of a job marketthat, despite minor ebbs and flows, remains fundamentally stable, with theoverall unemployment rate and participation levels holding steady amidst acomplex economic landscape.
TL;DR
Metric
Value
Details/Notes
1 Unemployment Rate
3.7%
Remained steady from the previous month, better than expected 3.8%
2 Labor Force Participation Rate
62.5%
Unchanged, maintaining the highest rate since February of the previous year
3 Total Unemployed Americans
6.12 million
Decreased by 144,000, indicating positive job market shifts
4 Total Employed Americans
161.15 million
Slight decrease of 31,000, reflecting minor employment adjustments
5 Overall Job Market Stability
-
Despite minor changes, the market remains fundamentally stable
The latest forecast predicts no change in the UnemploymentRate, which is expected to remain at 3.7%, matching the previous reading.
The upcoming release of the Unemployment Rateis scheduled for Friday at 1:30 PM GMT.
The last time, the USUnemployment Rate was announced on the 2nd of Februray, 2024.You may find the market reaction chart (XAUUSD M5) below:
