NonFarm Payrolls


Nonfarm Payrolls rise 275K in February, January reading revised lower to 229K

US jobs report post-release checklist – March 8

NFP Actual, Consensus and Deviation Positive Nonfarm payrolls increased by 275,000 in February, higher than the 200,000 expected by markets.
NFP Revisions Negative Data from both December and January was downwardly revised (43,000 less jobs in December and 124,000 less jobs in January), meaning that employment was 167,000 lower than previously reported.
Unemployment rate Negative The US Unemployment Rate increased to 3.9% in February from 3.7% in January. Economists expected the jobless rate to remain unchanged.
Labor Force Participation Rate Neutral The Labor Force Participation rate stood at 62.5% for a third consecutive month.
Average Hourly Earnings Negative Wage growth decelerated more than expected. Average Weekly Earnings increased by 4.3% on year in February, less than the 4.4% estimates. On month, earnings rose by a meager 0.1%, well below the 0.3% increase anticipated.

 

US jobs report pre-release checklist – March 8

Previous Non-Farm Payrolls  PositiveNonfarm Payrolls rose by 353,000 in January, almost doubling the market expectation of a 180,000 increase.
Challenger Job Cuts NegativeUS employers announced 84,638 job cuts in February, an increase compared to the previous month and to the same month a year ago. February’s total number of cuts was actually the highest for the month since 2009.
Initial Jobless Claims   NeutralThe number of people filing for unemployment benefits for the first time has increased slightly in the last month, but remains low by historical standards. The 4-week moving average until February 23 was at 212,250, slightly up from the 207,750 average at the end of January.
Continuing Jobless Claims  NegativeThe overall number of people in the US collecting unemployment benefits rose more than expected to 1.906 million in the week ending February 23. This is the first time the figure exceeds the 1.9 million threshold since late November.
ISM Services PMI  NegativeThe ISM Services PMI data for February suggested a slowdown in the service sector’s activity. The employment subindex fell to 48.0 from 50.5 a month earlier, suggesting that on average employers shed jobs during the month.
ISM Manufacturing PMI   NegativeThe headline Manufacturing PMI fell further into contraction territory. The Employment component signaled job losses persisted for the fifth month in a row, and at a faster pace.
University of Michigan Consumer Confidence Index  NeutralThe University of Michigan Consumer Sentiment index fell slightly in February but broadly held its gains over the past three months.
Conference Board Consumer Confidence Index  NeutralThe Conference Board Consumer Confidence Index also fell slightly in February, and consumers said they were more concerned about the labor market's current situation and future conditions. 
ADP Employment Report  NeutralADP’s gauge of private-sector employment increased by 140,000 in February. This was better than the 111,000 jobs created in January, but it missed market estimates of a 150,000 rise.
JOLTS Job Openings  NeutralJob openings in the US declined to 8.86 million in January from over 9 million in December. This signals that labor market conditions are cooling slightly, but the numbers are still far above prepandemic levels.

 

JANUARY US JOBS REPORT REVIEW


DECEMBER US JOBS REPORT REVIEW


NOVEMBER US JOBS REPORT REVIEW


OCTOBER US JOBS REPORT REVIEW


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BIG PICTURE

The NFP report: The most important economic indicator for the US

NFP Definition

NonFarm Payrolls report measures the number of jobs added or lost in the US economy over the last month. It is released usually on the first Friday of each month, at 8:30 EST. It is published by the US Department of Labor.

This report is important because the US is the largest economy in the world and its currency (US Dollar) is the global reserve currency. The many economies peg (tie) their currency's value to the reserve currency, many commodities such as gold and oil are priced in terms of the reserve currency and the local economy's debt is priced in terms of its own currency.

The NFP report, because of its importance to the reserve currency, tends to move all markets: currencies, equities, treasuries, interest rates and also commodities. It does it so immediately after the release of the economic data and sometimes so dramatically.

US Departament of Labor

The mission of the DOL is to assure the prosperity of the wage earners, job seekers which includes more than 10 million employers and 125 million workers in the USA. 180 federal laws and several federal regulations are the key of the Departament Labor promotion of benefits and rights.

To Trade...

Those who advocate trading NFP releases base their advice on a previous preparation and some fundamental research. The elaboration of some macroeconomical analysis is essential for successful trading.

This research includes averages of past headline NFP numbers, Weekly Jobless Claims, ISM Industry Data reports or other employment reports as the ADP or the Challenger. Tracking these events is fundamental on the preparation of the trades to set up just after the release. You can check all this data on FXStreet Economic Calendar: ADP Report, Initial Jobless Claims, ISM Industry Data.

... Or Not to Trade

A lot more skeptical on the benefits of trading the event, as you can read in his article “Step aside the NonFarm Payrolls release”, Adrián Aquaro, President at Trader College, says its importance has decreased a little bit lately:

“Even if the impact has diminished gradually over time, still generates huge attention on the markets and it normally drives important monthly trends. Lately another event (the Fed Monetary Policy Meetings) has been driving similar attention, thanks mainly to the Interest Rates being at 0%.”

What is a NonFarm Payrolls Forecast?

A NonFarm Payrolls Forecast is some sentiment-based piece of content that tries to predict what the NFP numbers will be and what impact will they have on the markets. In this page, you'll find some articles and tools that will help you to understand which could be the outlook for ADP Report, Unemployment Rate, Average Hourly Earnings, Labor Force Participation Rate and some other important economic indicators.

The ADP (National Employment Report) is an estimation of nonfarm employment which is based on a survey of thousands of private sector businesses. One of the biggest differences between NFP data and ADP data is the sample and methodology of the study. ADP Jobs Report could show us an anticipation of the NFP's trends. Some outlooks are mainly based on the Jobs Report, in past data and in other related job indicators like Initial/Continuing Jobless Claims.