NonFarm Payrolls

OCTOBER US JOBS REPORT

NFP Quick Analysis: The USD does not need reasons to remain resilient, but pointing fingers at Florence helps

Yohay Elam
FXStreet

The US gained only 134,000 positions in September, significantly lower than official expectations that stood at 185,000 and below unofficial projections which were higher. Fingers are pointed to Florence. The BLS said that Hurricane Florence may have affected some industries. Everybody knows that the storm was not as harsh as Harvey or Irma last year, but for markets, it is good enough.

US jobs report post-release checklist – October 5th, 2018

NFP Actual, Consensus and Deviation NegativeDownward surprise from 185K expected to 134K.
NFP Revisions PositiveUpward revision from 201K to 270K.
Unemployment Rate PositiveDown from expectations and last release, now at 3.7%.
Labor Force Participation Rate NeutralUnchanged at 62.7%.
Average Hourly Earnings NeutralSame reading 0.3% and downward revised.

Payroll Growth Slows But Won't Blow the Fed Off Course

Wells Fargo Research Team
Wells Fargo

Payroll growth slowed to 134,000 in September, likely depressed in part by Hurricane Florence. Other labor market indicators, including a decline in unemployment and rising earnings, show no signs of cooling. Payroll growth disappointed in September with employers adding 134,000 jobs. That was likely depressed by Hurricane Florence hitting the Carolinas during the survey reference period. Relative to last year's storms, Florence hit a less populated area and also came at the tail end of the survey week, which meant many workers in its path were still able to clock in for part of the week and be counted as employed.

US jobs report pre-release checklist – October 5th, 2018

Previous Non-Farm Payrolls PositiveUpward surprise from 191K expected to 201K.
Challenger Job CutsNegativeA higher reading in Sep, is a bad omen for the job situation..
Initial Jobless Claims PositiveA smaller than expected number indicates strength in the labor market.
Continuing Jobless Claims PositiveA lower print has positive implications for consumer spending.
ISM Non-Manufacturing PMI PositiveEmployment activity in the non-manufacturing sector grew +5.7% in Sep.
ISM Manufacturing PMI Positive
ISM’s employment sub-component increased +0.3% in Sep.
University of Michigan Consumer Confidence Index NeutralA sligthly lower reading (100.1) than expected (100.8, which was last month's reading).
Conference Board Consumer Confidence Index PositiveThe index increased in Sep following a large improvement in Aug.
ADP Employment Report PositiveWay above expectations (230k, better than 185k expected).
JOLTS Job Openings PositiveA new high of 6.9M indicates companies are posting more job openings.

SEPTEMBER US JOBS REPORT

NFP Quick Analysis: America gets a raise and so did the US Dollar

Yohay Elam
FXStreet

US wages rose 0.4% MoM in August, double the early expectations. The broader YoY measure shows an acceleration from 2.7% to 2.9%, also above initial projections. Higher salaries imply further consumption and the "right" kind of inflation, one that comes from increasing demand and nor from external factors such as rising oil prices or price hikes stemming from tariffs. Wages are correlated to core inflation.

US jobs report post-release checklist – September 7th, 2018

NFP Actual, Consensus and Deviation PositiveUpward surprise from 191K expected to 201K.
NFP Revisions NegativeRevised down from 157k to 147k.
Unemployment Rate NegativeUp from expectations but equal last release at 3.9%.
Labor Force Participation Rate NegativeLess than expected at 62.7% vs. 63.0%.
Average Hourly Earnings PositiveBig deviation upwards between expected 2.7% at 2.9% Actual.

NFP: Buoyant US jobs report keeps the dollar bid

Joseph Trevisani
FXStreet

The buoyant and largely better than expected nonfarm payrolls gave a modest boost to the dollar with the greenback gaining about 50 points against the euro and 20 versus the yen in the first half hour after the release. Payrolls at 201,000 beat the consensus estimate by 10,000 but the equal downward revision to the July number left the two-month total flat. The headline U-3 unemployment rate, which only counts as unemployed those who have looked for work in the prior month was stable at 3.9%. The more realistic U-6 rate, charting those who have sought work in the past year, improved slightly to 7.4% from 7.5% in July.

NFP Recap: Are Wages Finally Turning the Corner?

Matt Weller, CFA, CMT
Faraday Research

In a world where financial media sensationalizes every US jobs report as “The Most Important Jobs Report Ever,” even the most bombastic personalities had to admit today’s release was relatively insignificant, at least as far as NonFarm Payroll reports go. After all, the US economy had shown job growth for 94 consecutive months heading into today, and the Federal Reserve has seemingly already decided to raise interest rates at its meeting later this month.

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NFPSPECIAL RESOURCE

Crash Course to Become an NFP Expert

Have you ever read news updates mentioning rising unemployment or falling payrolls yet you don’t have a clue what these mean for the Forex market?


Well, today is your lucky day the FXStreet team has been working on a research material to make you an expert in trading the NFP report.

Considered the backbone of the U.S. economy, the NFP has an history of rocking global markets, especially the FX market via the U.S. Dollar. Other signs of economic growth are often viewed with a little suspicion by market participants if employment figures are not at a healthy level.

Since the headline number for NFP tends to move all financial markets, as a trader it is important that you prepare for various scenarios, by developing models to predict the likely headline number and to trade the outcome.

To accomplish that, you should start with a solid understanding of employment conditions in the U.S. The more knowledge you have, the more confident you will feel trading the NFP. Making your own predictions, you don’t need to accept the market estimates as written in stone anymore. Besides, they are often well off the mark.

Ready to make a leap and become an NFP expert?

BIG PICTURE

The Nonfarm Payrolls 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.

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