NonFarm Payrolls

US gains only 266K jobs in April, causing a market rethink

Breaking: US adds 266,000 jobs in April vs. 978,000 expected

Nonfarm Payrolls (NFP) in the US rose only by 266,000 in April, the data published by the US Bureau of Labor Statistics showed on Friday. This reading followed March's increase of 770,000 (revised from 916,000) and missed the market expectation of 978,000 by a wide margin.

US jobs report post-release checklist – May 7th, 2021

NFP Actual, Consensus and Deviation Negative The US economy added just 266K jobs in April, much lower than the 978K expected
NFP Revisions Negative March figure was also revised downwards from 916K to 770K.
Unemployment rate Negative

U3 unemployment rate came also underperformed, unexpectedly jumping a tick from 6% to 6.1%. U6 underemployment light decreases to 10.4%.

Labor Force Participation Rate Positive The share of people in the workforce increased from 61.5% to 61.7%
Average Hourly Earnings Positive Yearly wages overperformed -0.4% expectations by gaining 0.%$, monthly pay-rise figures increased from -0.1% to 0.7%.



US jobs report pre-release checklist – May 7th, 2021

Previous Non-Farm PayrollsPositiveThe US economy added 916K jobs in March, job growth picking up steam as the pandemic fades in the United States.
Challenger Job CutsPositiveUS corporate layoffs continued to diminish in April, with just 22.9K jobs lost, the lowest mark in the last ten years. 
Initial Jobless Claims PositiveFirst-time employment claims are also on the decline, with jobless petitions falling below 600K in the week ending on April 30 for the first since the pandemic struck.
Continuing Jobless Claims NeutralThe unemployment-benefit claimants' downtrend has slowed down during the last month, with figures plateauing a bit above 3.6M, still twice as higher than pre-pandemic levels.
ISM Services PMI PositiveThe labor sub-index in the US main service survey rallied came out at 58.8 (better than 55 expected), reaching its highest level since September 2018.
ISM Manufacturing PMI NegativeThe employment sub-index in the US main manufacturing survey finally retraced from three-year highs in March to a still-healthy 55.1 figure in April.
University of Michigan Consumer Confidence Index PositiveThe UMich consumer sentiment survey is finally showing signs of optimism, reading 88.3, a post-pandemic high.
Conference Board Consumer Confidence Index PositiveThe Conference Board Consumer Confidence Index® also rallied, from 109.7 to 121.7, just ten points below where it was in February 2020.
ADP Employment Report Neutral
Private sector employment gains rose to 742K in April, the biggest figure in the last eight releases, but a bit below the 800K job gain expectations.
JOLTS Job Openings PositiveAlthough lagging by nature, the JOLTS indicator is also already reflecting the post-pandemic recovery, showing 7.367M job vacancies in February highest since January 2019. 







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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.