NonFarm Payrolls

Non-Farm Payrolls miss with 1371K

US jobs report post-release checklist – Sep 4th, 2020

NFP Actual, Consensus and Deviation NegativeThe US economy added 1.37M jobs in August, slightly below 1.4M expectations.
NFP Revisions NeutralJuly figure revised slightly downwards, from 1.763M to 1.734M.
Unemployment ratePositive

U3 unemployment rate fell from 10.2% to 8.4%, overcoming expectations of 9.8%. U6 underemployment rate also down from 16.5% to 14.2%.

Labor Force Participation Rate PositiveThe share of people in the workforce rose from 61.4% to 61.7%, continuing the recovery started in May.
Average Hourly Earnings PositiveBoth the yearly (4.7%) and the monthly (0.4%) growth of wages beat expectations.



US jobs report pre-release checklist – Sep 4th, 2020

Previous Non-Farm PayrollsPositiveThe US economy added 1.76M jobs in July, a better-than-expected figure, although the ytd job-loss number is still around 13M.
Challenger Job CutsPositiveThe number of corporate layoffs fell to 115K in August, the lowest figure since the pandemic outbreak. 
Initial Jobless Claims NegativeFirst-time employment claims have picked up the last couple of weeks, back over 1 million.
Continuing Jobless Claims NegativeThe number of unemployment benefit receivers is falling at a painfully slow rate, still above 14.5 million. 
ISM Services PMI PositiveThe employment sub-index in the US main services survey jumped over 5 points in August, continuing its recovery but still in contraction territory (47.9).
ISM Manufacturing PMI PositiveEmployment sub-component in the US flagship manufacturing survey keeps recovering, printing a better-than-expected 46.4 number in August.
University of Michigan Consumer Confidence Index NeutralThe UMich consumer sentiment survey is failing to pick up, stuck in the low 70s since the pandemic struck.
Conference Board Consumer Confidence Index NegativeThe Conference Board Consumer Confidence Index® further decreased in August to 84.8, the lowest level in more than five years.
ADP Employment Report Negative
Private sector employment just increased by 428K jobs in September, a very modest number compared to 950K expectations.
JOLTS Job Openings PositiveThe number of hires was back on track on June, increasing to 5.88M, showing some pick up after curfew ended in several states. This is still a lagging indicator, though. 





US Non-Farm Payrolls Quick Analysis: The complete labor market surprise

The labor market collapse reversed in May as a totally unexpected gain in employment underlined the resilience of the American economy and the positive impact of the government’s efforts under the $2 trillion Payroll Protection Program to keep people at work. Non-farm payrolls rose by 2.54 million last month, a vast improvement from the 20.5 million who were furloughed in April and less than half the -8 million forecast.


US NFP: When the worst sends markets higher

The US labor market collapse in April surpassed all previous records for job losses but markets have already turned to the future as reopening states spur economic revival hopes. Payrolls dropped by 20.5 million, less than the 22 million estimate and the unemployment rate soared to 14.7%, the highest since 1939 and the end of the Great Depression and just before the Second World War rearmed the US economy.


US NFP Quick Analysis: A grim future partially foretold

American NFP shed 701,000 jobs in March, more that the worst loss during the financial crisis and surprising markets with the Labor Department’s ability to capture the rapid job losses. Economists had predicted just 100,000 firings, expecting the full accounting to be delayed until April as the US slows drastically from the economic impact of the Coronavirus.

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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.