• Our NFP leading indicators show a mixed picture ahead of April's US jobs report, failing to provide a strong trading signal
  • ADP Employment Report provided the most positive signal, but weak Jobless Claims and manufacturing employment data balance it out
April's US jobs' report is coming out on Friday at 12.30 GMT and traders are looking for clues ahead of it. After an up-and-down sequence in the last two releases, the US labor market is forecasted to be back on the stable but positive trend that has been carrying for the better part of the last decade. Headline Non-Farm Payrolls report is expected to come out with 185K new jobs added, while Unemployment Rate should be stable at record 3.8% lows and Average Hourly Earnings are forecasted to be ticking up 3.3% year-over-year and 0.3% month-over-month.
That would paint a positive labor market picture that would help the Federal Reserve avoid the interest rate cut talk that has been getting around for the last weeks. But surprises might be on the way and we are looking at the regular NFP leading indicators for clues to trade the event.
Now complete, our NFP pre-release checklist shows a mixed balance of positive and negative signals from the leading indicators released prior to the US jobs report.
On the positive side, we have the previous NFP figures, which showed a good bounce back, plus the really positive ADP Employment report (+275k in April), regularly the indicator better correlated to the NFP headline figure, as our Senior Analyst Joseph Trevisani explained earlier this week. The reduction in the Challenger Job Cuts and the healthy increase in the CB Consumer Confidence Index also point to a good labor market situation. The positive signal from the ISM Non-Manufacturing Employment Index is much weaker, as it comes from a couple of months ago. April's report will not be released until 90 minutes after the jobs' report.
But not everything has come out on the green side, as we have seen both Initial (230K) and Continuing (1.671M) Jobless Claims rise during the last couple of weeks above their expected figures. And, as reported earlier in the week, the ISM Manufacturing Employment Index and the UMich Consumer Confidence Index also provided negative signals.
All in all, these leading indicators put together the following checklist, which is mixed and quite average, so we probably should not expect big outlier figures on this month's labor market indicators, thus expecting fewer fireworks in the markets. Check it out:
Previous Non-Farm Payrolls Positive NFP headline and revision numbers showed moderate progress.
Challenger Job Cuts Positive Corporate layoffs retraced in April from 60.587K back to 40.023K, which should signal an improvement in the labor market.
Initial Jobless Claims Negative The first-time claims have increased in the last two weeks, back above the 200K reference mark.
Continuing Jobless Claims Negative The number of individuals currently unemployed has been trending up for the last couple of weeks, now at 1.671M.
ISM Non-Manufacturing PMI Positive ISM’s non-manufacturing employment sub-component increased 0.7% from the Feb reading of 55.2%.
ISM Manufacturing PMI Negative ISM’s manufacturing employment sub-component decreased to 52.4% from the Mar reading of 57.5%.
University of Michigan Consumer Confidence Index Negative Retracing a bit from 98.4 to 97.2. Consumer confidence in the UMich survey dipping after the bounce seen after the US government shutdown ended.
Conference Board Consumer Confidence Index Positive Consumer optimism showing great progress in the CB survey, with a rise to 129.2 in April from the 124.2 seen in March.
ADP Employment Report Positive Showing a very positive trend by adding an estimate of 275K jobs.
JOLTS Job Openings Negative Job openings abruptly halted their positive trend with a pronounced dip in February.

This fundamental analysis article is based on our NFP crash course to become an NFP expert. Its "modelling on related macro-economic data will enable you to elaborate a fundamental analysis to estimate the next NFP release". 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD retreats on the hawkish Fed cut

EUR/USD is trading closer to 1.10 after the Fed cut rates but signaled no further rate reductions. The bank acknowledged the strong labor market and robust consumption. However, it is worried about investment.


GBP/USD falls further away from 1.25 after the Fed

GBP/USD is trading further below 1.2500 after the Fed cut rates but signaled no fresh moves. The Brexit impasse and weak UK inflation figures weigh. 


USD/JPY pops 20 pips on the as expected Fed

USD/JPY is currently trading at 108.32 following the FOMC, travelling between 108.08 and 108.33 but is virtually flat on the day as the Fed lowered rats as expected by 25 basis points.


Australian Employment Preview: The Fed and then the RBA

Higher unemployment could set the stage for RBA cuts. Employment is expected to increase by 10,000 in August after July’s addition of 41,100. Federal Reserve rate decision and economic projections in the background

Read more

Gold drops on strength in the Greenback following a dubious Fed rate cut

Gold prices have dropped on the Federal Reserve decision whereby no real assurance of more cuts down the line were presented. However, the door has been left open which limits the downside potential in this move.

Gold News

Forex Majors