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Employment seems to be on a good track now

Employment Cools Off Further in Canada and the US During July

Posted Friday, August 7, 2020 by
Skerdian Meta • 2 min read

The unemployment rate surged all across the globe during the lock-down months. In the US, the unemployment rate surged to 14.7%, although some economists had the idea that unemployment climbed to 20%. In Canada, the unemployment rate jumped to 13.7% in May, but it cooled off to 12.3% in June, as last month’s report showed. Today employment report from Canada and the employment report from the US showed another decline, beating expectations.

US Employment Report

  • Prior was +4800K (revised to 4791K)
  • Two month net revision +17K
  • Change in private payrolls +1462K vs +1200K expected
  • Change in manufacturing payrolls +26K vs +255K expected
  • Unemployment rate 10.2% vs 10.6% expected
  • Adjusted for misclassification 11.1%
  • Prior unemployment rate 11.1%
  • Participation rate 61.4% vs 61.8% expected
  • Prior participation rate 61.5%
  • Underemployment rate 16.5% vs 18.0% prior
  • Average hourly earnings +0.2% m/m vs -0.5% expected
  • Average hourly earnings +4.8%% y/y vs +4.2% expected
  • Average weekly hours 34.5 vs 34.4 expected
  • Employment in the household survey +1.4m
  • Part time jobs +803K
  • Full time jobs little changed
Comments from the BLS:
“Government employment rose by 301,000 in July but is 1.1 million below its February level. Typically, public-sector education employment declines in July (before seasonal adjustment). However, employment declines occurred earlier than usual this year due to the pandemic, resulting in unusually large July increases in local government education (+215,000) and state government education (+30,000) after seasonal adjustment.”
However it was even stronger than that and the majority of it was in private payrolls. The unemployment rate was also better but you can discount most of that because of a dip in participation rather than the rise expected. July employment 418.5 K vs. 380.0K estimate.

Canadian Employment Report

  • Prior was 952.9K
  • Canada unemployment rate 10.9% vs. 11.0% estimate
  • Prior unemployment rate 12.3%
  • Full-time employment 73.2 K vs. 488.1 K last month
  • Part-time employment 345.3 K vs. 464.8 K last month
  • Hourly wage rate permanent employees 5.7% vs. 5.4% estimate. Last month 6.8%
  • Participation rate 64.3% vs. 64.5% estimate. Last month 63.8%
  • Job gains were driven by trade sector (+101.3 K)
  • Business support sector led the losses at -20.1 K
  • Private employment rose 375.8 K in July. Vs. 867.3 K last month
  • Public unemployment rose 48.9 K in July vs. 74.5 K in last month
  • 5.5 million Canadian workers were affected by the Covid 19 economic shut down which included 3 million drop in employment and an absence from work of 2.5 million
  • Employment is within 1.3 million of its pre-Covid February level
  • Number of people employed but worked less than half their usual hours for reasons likely related to Covid 19 drop by 412 K
  • The total number of affected workers stood at 2.3 million a reduction since April of 58%
  • CLICK HERE for the breakdown from statcan
Overall, the numbers keep on heading in the right direction. However the gains this month were largely in part-time employment. The USDCAD has moved modestly lower after the report. The pair is trading between its 200 hour moving average above at 1.33593 and its 100 hour moving average below 1.33278. The moved to the downside tested the 100 hour moving average and we are seeing a modest bounce off that level. The price currently trades at 1.3334.
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