Canada August employment change +22.1 versus +25.0K estimate

• Prior month -2.8K
• Employment change 22.1K vs 25.0 K estimate
• Unemployment rate 6.6% vs 6.5% estimate.HIGHEST since May 2017 outside of 2020 and 2021 Covid period
• Prior month unemployment rate 6.4%
• Full-time employment -43.6K vs 61.6 K last month.
• Part-time employment 65.7K vs -64.4K last month
• Participation rate 65.1% vs 65.0 K last month
• Average hourly wages YoY 4.9% vs 5.2% last month

The prior two months showed declines of -2.8K and -1.4K. The gain is a relief, but is offset from the unemployment rate moving to 6.6% from 6.4% last month. That is the HIGHEST since May 2017 outside of 2020 and 2021. The mix of the Full and part time is also not great with the gain of 61.6K in full time last month, saw most of that reversed with -43.6K decline this month.

Overall, the trend is still weaker and supports further monetary policy reaction from the BOC. This week the BOC did cut rates by 25 basis points with Macklem saying if projections on inflation prove out, further cuts can be expected.

The USDCAD was trading at 1.3490 prior to both the US and Canada employment reports. The US jobs report tends to overwhelm the Canada jobs report. It is being touted as weaker with revisions contributing to the weakness allthough the unemployment rate did decline. The USDCAD has moved lower to 1.3465. The Fed funds probability sees 51% chance for a 50 cut vs around 57% before. Call it 50-50.

Some further detail:

By Demographic:

• Core-aged women (25-54): Employment grew by 20,000 (+0.3%).
• Other major demographic groups: Employment held steady.

By Industry:

• Increased:
  • Educational services: +27,000 (+1.7%)
  • Health care and social assistance: +25,000 (+0.9%)
  • Finance, insurance, real estate, rental and leasing: +11,000 (+0.8%)
• Decreased:
  • Other services: -19,000 (-2.3%)
  • Professional, scientific, and technical services: -16,000 (-0.8%)
  • Utilities: -6,800 (-4.5%)
  • Natural resources: -6,500 (-1.8%)

By Region:

• Increased:
  • Alberta: +13,000 (+0.5%)
  • Nova Scotia: +5,000 (+1.0%)
  • Manitoba: +4,400 (+0.6%)
  • Prince Edward Island: +900 (+1.0%)
• Decreased:
  • Newfoundland and Labrador: -2,400 (-1.0%)

Looking at the total hours:

• Total hours worked:

  • Little changed in August: -0.1%
  • Up 1.4% compared to 12 months earlier

• Average hourly wages among employees:

  • Increased by 5.0% year-over-year in August (up $1.69 to $35.16)
  • Growth of 5.2% in July (not seasonally adjusted)
• There were 1.5 million unemployed people in August 2024, an increase of 60,000 (+4.3%) from July and an increase of 272,000 (+22.9%) from August 2023.

This article was written by Greg Michalowski at www.forexlive.com.