The US jobs data was considerably stronger than expected and leave no doubt about the December meeting being live despite the year-end considerations that some had seen tying the Fed’s hands. The dollar broke through key chart points near JPY122 and $1.08 for the euro. 

Nonfarm payrolls leapt 271k, nearly 100k more than the consensus anticipated. The August and September job growth was revised higher by a minor 12k. September was actually revised down by 5k, with August being revised up 17k. 

The unemployment rate slipped to 5.0% while the participation rate was unchanged at 62.4%.The underemployment rate fell to 9.8%.It is the first sub-10% print since before the Great Financial Crisis.The 0.4% increase in average hourly earnings was twice the expected increase and lifts the year-over-year rate to 2.5%, a new cyclical high. 

Private sector payrolls added 268k jobs. The 3k increase in government workers was the least in several months.Over the July-September period, the government add an average of 29k a month. 

It is difficult to find the cloud in the silver lining as economists are often wont to do. Even the household survey, which sometimes is not consistent with the establishment survey, saw a 320k increase in jobs, offsetting in full the 236k decline in September. Manufacturing employment that had fallen for two consecutive months was flat, which compares to expectations of a 5k decline, and weakness of the ADP survey and soft manufacturing ISM employment. 

US interest rates have moved sharply higher response to the jobs data. The 10-year yield is near 2.30% (+7 bp), and the 2-year is near 92 bp (+9 bp). The implied yield on the December Fed funds futures has pushed 2 bp higher.  

Canadian jobs data were also better than expected. It grew 44.4k jobs compared with a consensus estimate of 10k.The unemployment rate ticked down to 7.0% even though the participation rate rose to 66.0% from 65.9%. The consensus had expected a decline in the participation rate. Full-time jobs grew by a lesser 9k after a nearly 62k loss in September. Despite the local data, the Canadian dollar is being overwhelmed by the surging greenback.