Canada reported much stronger jobs data than the market expected, sending the Canadian dollar broadly higher. However, the strong showing in Canada should not be seen as a hint or signal of what to expect from the US.
Canada grew 79.1k jobs in November, of which 38.6k were full time jobs. The consensus had look for a modest 15k rise after a 43.2k fall in October. November's jobs rise is third in the past four months and is the largest since Sept 2008.
Job growth was concentrated in educational services (37.9k) and manufacturing (12.6k), the FIRE industries--finance, insurance and real estate--(12.2k). On the other hand, the demand for labor did not translate into higher wages. Average hourly wage growth slowed to 2.3% year-over-year from 3.3% in Oct. This is the smallest increase since March 2007, according to StatsCan. This warns of lingering headwinds on consumption.
Canada has lost about 320k jobs since employment peaked in Oct 2008. US nonfarm payrolls have fallen about 5.5 mln since Oct 2008. THe US economy is roughly 10 times larger than Canada's, but has lost 17 times more jobs.
With Canada's government seeming less concerned about the Canadian dollar's strength and the strong jobs data, look for the Canadian dollar to play catch-up after lagging recently. A break of CAD1.04 is needs to signal a US dollar return toward CAD1.02, the year's low. We like the Canadian dollar against the yen and Swiss franc too.
Strong Canada Jobs Data Says Nothing About US
![Strong Canada Jobs Data Says Nothing About US]()
Reviewed by magonomics
on
December 04, 2009
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