Jobs and GDP

Today was a double whammy of reports. At 8:30 am we had both the US non farm payrolls for August, and in Canada we had the June release of GDP. Both of these indicators will help both the Federal reserve and the BOC with their data for the September meeting.

The US employment report slightly beat expectations coming in at 187,000 new jobs ( est 170,000 ) with unemployment remaining at 3.80%. This is about as goldilocks as you can get ,and likely leaves the Fed where it was heading into today’s report.

The big miss was on Canadian GDP. Analysts had been expecting a .30% gain in GDP for June, and it came in at exactly 0.00% for the quarter, although it did drop .20% from Q1 to Q2. Keep in mind this is the June final reading, so this is how things performed 60 days ago. Based on the recent economic activity, I don’t think things got much better over July and August. This report should keep Tiff and Co. on the sidelines at the next rate announcement. We also saw a revision to previous GDP from .80% down to .60%, meaning GDP for Q1 was overstated by about 33%.

No matter how you look at it, Canadian GDP is declining, and barely holding on right now. Another rate hike seems like it is off the table in September ( unless we see some massive data in the next few days that changes the outlook )