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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CANADA
- Ahead of next week’s BoC decision, we take stock of the differing degrees of moderation in the Canadian and US labor markets.
- The unemployment rate trajectories offer a clear enough picture, with the Canadian u/e rate rising to 5.8% in Nov and Dec, a swift increase from the 5.0% in the spring which in turn has triggered the Sahm rule typically indicative of a recession. That’s despite the u/e rate surprising a tenth lower than expected in Dec, when a pause in labor force growth, despite still very strong population growth, helped limit the impact from soft employment growth.
- Conversely, the US u/e rate recorded 3.7% in Dec vs the April low of 3.4% and is still some way from triggering the Sahm rule.
- Beveridge curves suggest Canadian vacancies (data only available to Oct) are at a level that is helping this rise in the u/e rate. The US in contrast is still at vertical part of the curve with no notable increase in the u/e rate compared to historical ranges despite the reduction in vacancy rates from particularly high levels. If pre-pandemic periods are a good indicator this could start to change when the vacancy rate dips below 5% (currently 5.3%).
- However, and importantly for the BoC, Canadian wage growth shows no sign of the above moderation over 2H23, with various measures growing in excess of 5% Y/Y and accelerating most recently in December.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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