Cooling in US labour market arrives earlier than expected

Bloomberg

The US labour market moderated somewhat in November, a development economists have been preparing for — though maybe not this soon.
While job gains of 155,000 missed all forecasts, and the prior month’s reading was revised down, the figures are still consistent with solid economic growth. At the same time, wages which rose less than expected on a monthly basis, aren’t yet running away to a level that would encourage the Federal Reserve to raise interest rates at a more aggressive pace.
The key question is whether the labour market is merely settling back after robust gains or is about to deteriorate
further. A separate report showed consumer sentiment about the future was the
weakest this year, as opinions turned negative on the unemployment rate for the first time since mid-2017. The jobless rate in November held at the lowest since 1969.
Some cooling was expected eventually, as other indicators point to a softer economy in 2019, after $1.5 trillion in tax cuts and a government-spending boost juiced the data earlier this year.
For now, the jobs report showed that the labour market is so far holding up amid the dissipation of tailwinds and emergence of headwinds including President Donald Trump’s trade war with China.
“It’s still pretty broad-based strong hiring,” Julia Coronado, founder and president of MacroPolicy Perspectives LLC, said in a Bloomberg Television interview. Still, the wage figure “kind of confirms what we’re hearing from the Fed, that the inflationary pressures that they had maybe expected to be building at this point in the cycle aren’t that strong, and so that sort of supports the case for stretching out rate hikes in 2019,” Coronado said.
US stocks resumed their decline, while Treasuries fluctuated, as the Trump admi- nistration pressed its trade war with China and the jobs data added to concern that growth has peaked.
“It’s not like 155,000 is a terrible number, but it’s below what people were looking for,” said Michael Feroli, chief US economist at JPMorgan Chase & Co. After an unusually strong two quarters for the economy, “we’re looking for growth to step down this quarter and you should probably also expect to see the labour market cool
off some. It’s consistent with the economy coming off what people call a sugar rush.”

Canada posts record jobs gain despite concerns in oil sector
Bloomberg

Canada’s job market showed surprising resiliency last month in the face of a crisis in the oil sector, tempering worries about the economy’s health.
Employment increased by 94,100 in November, led by mostly full-time jobs that were broadly-based across industries, Statistics Canada said from Ottawa. That’s the largest one-month gain in records dating back to 1976. The jobless rate dropped to 5.6 percent, also the lowest in the data, from 5.8 percent in October.
This strength was unexpected — economists were only expecting a gain of 10,000 — in an economy hit by major headwinds in recent weeks.
Economists and policy makers have been warning turmoil in the oil sector, which is grappling with depressed prices, could undermine the economic outlook and the prospects for future interest-rate increases.