The first week of August closes with two high-impact data in the employment sector. The United States and Canada will report the evolution of non-farm payroll and the change in the unemployment rate respectively.
After assessing that there is still a way to go in the economic recovery, the Fed chose to maintain monetary policy. With an increase in seasonal inflation and a recovering labor market, the indicators were not enough to introduce major changes. However, the NFP data for July and August will be key for making decisions.
US Nonfarm Payrolls are projected to report growth toward 900K. This will have repercussions in the drop in unemployment rates, a positive result that is due to the economic recovery, vaccination campaigns and, in part, to a seasonal recovery.
As for the unemployment rate, it is expected to reach 5.7%, a decrease of 0.2% compared to the previous figure. If so, the unemployment rate would be halfway to recovery relative to pre-pandemic unemployment rates (March 2020, 3.5%).
Canadian employment data is also expected with high expectations. Following the Bank of Canada’s decision to reduce the asset purchase policy in order to assess the evolution of the economic recovery positively, accompanied by vaccination campaigns, the employment data is also expected to be positive.
The unemployment rate is projected to fall 0.4 percentage points from the previous month.
The data is likely to be around 7.4%, still far from pre-pandema levels (March 2020, 5.6%)