Jobs Report & USDCAD: Slowing Growth, Stable Market, or a Shift Ahead?

As markets brace for the December jobs report, expectations point to a slowdown in hiring, with projected gains of 155,000 to 160,000 jobs, down from November’s impressive 227,000 increase. Despite softer job creation and modest wage growth forecasts, the overall labor market remains stable. Meanwhile, USDCAD continues its upward trajectory, supported by bullish technical signals, though caution is advised amid signs of potential trend exhaustion. With critical employment data and market trends at play, traders should stay alert to evolving dynamics.

The December jobs report is expected to reflect a slowdown in hiring, with economists projecting a gain of 155,000 nonfarm payrolls, down from November’s 227,000 increase. However, Wall Street forecasts vary, with Goldman Sachs and Citigroup predicting lower gains of 125,000 and 120,000 jobs, respectively, alongside a rise in the unemployment rate to around 4.3%–4.4%. Seasonal trends and holiday hiring could add complexity to interpreting the data. While recent reports indicate ongoing but moderate labor market softening, experts suggest companies will continue to increase headcount at a slower pace. Average hourly earnings are expected to rise 0.3% for the month, with annual growth holding at 4%. Overall, analysts anticipate a steady but cautious labor market in the near term.

The U.S. economy is expected to add 160,000 jobs in December 2024, signaling a slowdown from November’s 227,000 gain, which was boosted by the resolution of Boeing strikes and hurricane disruptions. The unemployment rate is anticipated to hold at 4.2%, while wages are projected to increase 0.3% month-over-month, maintaining annual growth at 4%. Total payroll gains for 2024 are estimated at 2.144 million, marking the lowest annual increase since 2020 and falling short of the 3.01 million added in 2023. Despite the deceleration, the data suggests continued labor market stability.

In December 2024, U.S. private sector employment grew by 122,000 jobs, while annual pay increased by 4.6%, according to the ADP National Employment Report. The report, based on anonymized payroll data from over 25 million employees, highlights a modest slowdown in job creation and wage growth. Healthcare emerged as the top job-creating sector in the latter half of the year.

Since bottoming at 1.34186 on September 25, USDCAD has maintained a steady upward trend, driven by key technical signals. The rally was triggered by a non-failure swing reversal pattern and confirmed by a breakout above 1.36466. A “Golden Cross” formed as the 20-period EMA crossed above the 50-period EMA, reinforcing bullish momentum. Indicators such as the Momentum Oscillator above 100 and RSI above 50 continue to signal upward pressure, though negative divergence warns of a potential slowdown or reversal. Should bullish momentum persist, traders may monitor resistance levels at 1.44660 and 1.45817, while 1.42788 and 1.41770 could serve as potential downside targets in the event of a reversal.

In summary, while the December jobs report is expected to show a slowdown in hiring, the overall labor market remains resilient, with stable wage growth and continued job creation. However, mixed forecasts and seasonal factors add uncertainty. Meanwhile, USDCAD’s upward trend persists, driven by strong technical signals, though caution is warranted due to potential trend exhaustion. As key economic data unfolds, traders should remain vigilant, balancing bullish momentum with signs of potential reversals.