US Payrolls, Personal Income/Spending
US payrolls rolls rose by 203K in November, above the consensus estimate for a 185K gain but probably less of a surprise following the robust ADP survey earlier in the week. Net revisions were negligible. Encouragingly, the breakdown was a little stronger than the prior month, with higher paying goods producers adding 44K jobs and hiring in retail and leisure/hospitality not as strong. But the bigger surprise in this release was a three-tick decline in the unemployment rate to 7.0%, as furloughed government workers coming back into the labour force contributed to a sharp rise in household employment and participation failed to recoup all of the decline seen in the previous month. Separately personal spending beat expectations in October with a 0.3% rise, but a surprise 0.1% decline in incomes is not as encouraging for spending going forwards.
Even though the payroll figure may not have been a massive surprise after the ADP survey, the surprisingly sharp drop in unemployment could still be a negative for fixed income and supportive for the US$.
Canadian November Employment Figures
November’s jobs figure was a bit stronger than the street’s expectations, with employment up 21.6K, essentially in line with our call. The jobless rate stayed steady at 6.9%, as expected. Looking at the detail, the gains in employment were driven by part-time and self-employed work. However, large increases in private employment and manufacturing were an offsetting positive in terms of employment quality. Construction work was down, but other sectors including education, and business/support services edged higher.
Overall, a fairly good number pointing to a continuation of the trend of relatively healthy hiring seen in the last several months. Limited market reaction.