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There’s no denying that jobs reports tend to have a huge impact on longer-term forex price action. In this edition of Piponomics, let’s zoom in on the latest labor data released from the United States and Canada.

United States

The May non-farm payrolls figure came in close to consensus, posting a 217,000 increase in hiring for the month versus the estimated 214,000 gain. This was weaker compared to the previous 282,000 employment change figure for April, downgraded from the initially reported 288,000 reading.

Meanwhile, the jobless rate held steady at its 6-year low of 6.3% instead of rising to the projected 6.4% figure. The participation rate also stayed unchanged at 62.8%, indicating that Americans started returning to the labor force and mostly found full-time work during the period.

Other components of the NFP report also reflected small improvements. The underemployment rate, which measures the number of part-time workers still looking for full-time jobs, fell from 12.3% to 12.2% – its lowest level since October 2008. Average hourly earnings saw a 0.2% uptick in May after staying flat in April, signaling that wage growth is picking up.


As for Canada, the jobs situation has been less promising. After printing a very dismal employment change report for April, the Canadian economy failed to show an impressive rebound last month. Recall that hiring fell by 28,900 in April while the jobless rate didn’t budge from 6.9%. Only 25,800 jobs were recovered in May while the jobless rate ticked up to 7.0%.

Underlying figures revealed that much of the hiring gains were spurred by increases in part-time work. On a year-over-year basis, full-time work is still down by 26,700 while part-time hiring is up by 112,200 positions. Economic experts noted that this may be due to Canada’s aging population, signaling a potential structural shift in the labor market.

Wage growth has also slowed down, with Canada reporting four consecutive months of declining average earnings and bringing wage inflation down to an annualized 1.4%. This is significantly lower than Canada’s CPI, which suggests that consumer spending might be dragged lower.

How did USD/CAD react and how can these jobs figures affect longer-term forex price action? Here’s a quick look at USD/CAD’s 4-hour chart:

USD/CAD 4-hour Forex Chart
USD/CAD 4-hour Forex Chart

It appears that the pair has broken above the double bottom chart pattern’s neckline and retested that resistance-turned-support area, indicating that further rallies might be in the cards. From a bigger picture perspective, the U.S. economy has added 2.4 million jobs in the past 12 months while Canada has added only 86,000. Taking the size of their labor population into account, the U.S. has seen a 1.7% annual increase in employment while Canada has reported only a 0.5% gain.

Do you think the latest jobs figures suggest that USD/CAD is in for more gains? Let us know by voting through our poll below!