NonFarm Payrolls


US labor market cools down in April with a 175,000 growth in NFP

US jobs report post-release checklist – May 3

NFP Actual, Consensus and Deviation Negative Nonfarm Payrolls grew by 175,000 in April, sharply down from the 315,000 increase seen a month earlier and the lowest level since October. The figure came below market expectations of a 243,000 increase.
NFP Revisions Negative Revisions for both February and March show that employment in these two months is 22,000 lower than previously reported.
Unemployment rate Negative The US Unemployment rate rose back to 3.9% in April, while economists expected it to remain at 3.8%.
Labor Force Participation Rate Neutral The labor force participation rate was unchanged at 62.7%.
Average Hourly Earnings Negative Wages increased less than expected in April. Average Hourly Earnings rose 0.2% on the month, easing from the 0.3% rise seen in March. On year, earnings grew 3.9%, down from 4.1% in March.

 

US jobs report pre-release checklist – May 3

Previous Non-Farm Payrolls  PositiveNonfarm payrolls increased by 303,000 in March, well above expectations of 200,000 and accelerating from the 270,000 jobs created in February.
Challenger Job Cuts PositiveUS-based companies announced 64,789 job cuts in April, a 28% decline from the 90,309 layoffs announced in March. This is a 3.3% decrease compared with the same month a year ago.
Initial Jobless Claims   PositiveThe number of people filing for unemployment benefits for the first time has declined in April. The 4-week average until April 26 was at 210,000, down from 214,250 4-week moving average until March 29. 
Continuing Jobless Claims  PositiveThe overall number of people in the US collecting unemployment benefits stood at 1.774 million during the week ending April 19. The total number of claims fell during April.
ISM Services PMI  –The ISM Services PMI report for April hasn’t been released at the time of the release of Nonfarm Payrolls data.
ISM Manufacturing PMI   NegativeThe headline Manufacturing PMI swung back to contraction territory in April, and the Employment subindex continued to signal that companies on average shed jobs.
University of Michigan Consumer Confidence Index  NeutralThe University of Michigan Consumer Sentiment index was virtually unchanged for a third consecutive month in April.
Conference Board Consumer Confidence Index  NegativeThe Conference Board Consumer Confidence Index fell in April to the lowest level since July 2022. Consumers were less positive about the current labor market situation and more concerned about future job availability.
ADP Employment Report  PositiveADP’s gauge of private-sector employment increased by 192,000 in April, more than the 175,000 rise expected and easing slightly from the 208,000 advance seen in March.
JOLTS Job Openings  NeutralJob openings in the US fell more than expected in March to 8.49 million, the lowest in three years, adding to signs that the labor market is cooling. Still, the data is lagging as the NFP report is for April and the latest job openings data refer to March.

 

March US JOBS REPORT REVIEW

FEBRUARY US JOBS REPORT REVIEW

JANUARY 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.