Employment: U.S miss, Canada beat expectations

U.S unemployment rate falls to a 49-year low

The September U.S unemployment rate fell to +3.7% from +3.9% in August, the lowest rate since 1969.

The U.S non-farm payrolls rose to a seasonally adjusted +134K in September, the smallest gain in the past 12-months.

It would appear that Hurricane Florence may have had a bigger than expected negative impact on September payrolls.

Digging deeper, +150K Americans entered the labor force, keeping the number of adults working or seeking work steady at +62.7% participation rate.

Wages

Wages increased last month and advanced +2.8% as expected. The market was looking for a headline print of +185K and a +3.8% unemployment rate.

Average hourly earnings for all private-sector workers increased +8c last month to +$27.24.

Today’s solid report will likely keeps the Fed on track to gradually lift its benchmark interest rate.

Today’s report showed the manufacturing, construction and health-care sectors added jobs last month, while the retail and leisure and hospitality lost jobs.

Market

Markets are swinging in both directions following the mixed report, with S&P 500 futures now down 6 points after initially gaining. The 10-year yield has backed up to +3.233% from +3.196% and the dollar also remains better bid across the board.

Canada added more jobs than expected in September, as a sharp rebound in part-time hiring pushed the unemployment rate down to +5.9%.

The economy added a net +63.3K jobs in September on a seasonally adjusted basis. Market expectations were looking for a net gain of + 25K on the month.

Canada’s jobless rate eased to +5.9%, matching market expectations.

Average hourly wages advanced +2.4% in September on a one-year basis.

After initially rallying on the release, the loonie (C$1.2930) trades close to unchanged.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at nagribah
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.