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US job growth cools
The US job market cooled in January with weaker-than-expected job growth, while Canada’s labor market defied forecasts with a lower unemployment rate, as BoC Governor Macklem warned that U.S. tariff threats are already weighing on confidence.
US job growth slowed to 143,000 in January, missing forecasts of 170,000.
Unemployment in the US dropped to 4.0%, despite weaker hiring.
Wage growth accelerated by 0.5% month-over-month, raising inflation concerns.
Canada’s unemployment rate unexpectedly fell to 6.6%, defying forecasts.
The US labor market slowed more than expected in January, as employers added 143,000 jobs, falling short of the 170,000 forecast and significantly below the revised 307,000 increase in December. The weaker print signals that economic momentum may be moderating, with harsh winter storms and wildfires in California likely contributing to the shortfall.
Despite the hiring slowdown, the unemployment rate edged lower to 4.0%, suggesting that labor conditions remain tight. Wage pressures also intensified, with average hourly earnings rising 0.5% month-over-month to $35.87—beating expectations of a 0.3% gain and raising questions about inflation persistence.
Canada’s job market defies expectations as unemployment falls
Canada’s labor market surprised in January, with the unemployment rate unexpectedly dipping to 6.6% from 6.7%—defying forecasts for an increase to 6.8%. The result suggests resilience in hiring despite mounting concerns over economic softness flagged by the Bank of Canada (BoC).
If employment gains persist in the coming months, policymakers could face renewed concerns about inflationary pressures, making the path to monetary easing less straightforward.
BoC’s Macklem sounds alarm over Trump’s tariff threats
Bank of Canada Governor Tiff Macklem warned that escalating trade tensions with the U.S. are already dampening business and consumer sentiment in Canada and Mexico, adding another layer of uncertainty to North America’s economic outlook.
“Threats of new tariffs are already affecting business and household confidence,” Macklem said during a conference in Mexico City, noting that companies are growing more cautious in their investment decisions.
He cautioned that the longer the uncertainty lingers, the more it could drag on economic growth. Central banks, he added, face the difficult task of balancing weaker demand with the risk of inflationary pressures stemming from disrupted supply chains and higher import costs.
“The challenge will be to assess the downward pressure on inflation from reduced economic activity while balancing it against the upward pressure from higher input costs,” Macklem said, underscoring the complexity of monetary policy in a shifting trade environment.
