NonFarm Payrolls


Nonfarm Payrolls Data release

US jobs report post-release checklist – Jan 10th, 2019

NFP Actual, Consensus and Deviation NegativeHeadline job-growth number from December disappointed with a 145K print, below 164K expectations.
NFP Revisions NegativeNovember figure also revised lower, from 266K to 256K.
Unemployment ratePositive

U3 Unemployment Rate stayed at 3.5% as expected, with U6 Underemployment Rate falling from 6.9% to 6.7%, a positive development.

Labor Force Participation Rate NeutralThe share of people in the workforce stayed put in December at 63.2%.
Average Hourly Earnings NegativeThe biggest disappointment came from wage data, as both YoY (2.9%, 3.1% expected) and MoM (0.1%, 0.3% expected) figures missed expectations. 

 



January US JOBS REPORT REVIEW

US jobs report pre-release checklist – Jan 10th, 2019

 
Previous Non-Farm PayrollsPositiveNovember's 266k job growth was the biggest in the last 10 months, triggering a meaningful +2.57 deviation.
Challenger Job CutsPositiveThe number of corporate layoffs went down in December to 32.843K from 44.6K in November.
Initial Jobless Claims PositiveThe 4-week moving average for the number of first-time employment claimants went down from 233.5K to 224K, a positive development in the last month.
Continuing Jobless Claims NegativeThe number of individuals currently receiving unemployment benefits has risen in three of the last five weeks, with four consecutive worse-than-expected releases.
ISM Non-Manufacturing PMI NeutralEmployment sub-component in the ISM Non-Manufacturing PMI retraced a bit in December, from 55.5 to 55.2, still way into expansion territory.
ISM Manufacturing PMI NegativeEmployment sub-component in the ISM Manufacturing PMI disappointed for the fourth month in a row, printing a modest 45.1, way into contraction territory.
University of Michigan Consumer Confidence Index PositiveUMich consumer survey rose to 99.3 in December, very close to its multi-year highs.
Conference Board Consumer Confidence Index NeutralCB consumer survey showed a small retracement from 126.8 to 126.5 in December, keeping its 4-month range between 125 and 127 levels.
ADP Employment Report Positive
The leading indicator most correlated to the NFP printed an encouraging 202k job gain for December, a 7-month high.
JOLTS Job Openings PositiveJob openings rose to 7.267 million in October, just the second month showing a positive trend within the last seven.

 

December US JOBS REPORT REVIEW

November US JOBS REPORT REVIEW

NFP Quick Analysis: Greenback comeback set to extend, still the cleanest shirt in a dirty pile

The world's largest economy gained 128,000 jobs in October, better than 89,000 projected. Low estimated is the result of the strike at General Motors, which caused a significant drop in manufacturing jobs. The best news come from the revisions – October's gains come on top of 95,000 job gains previously unaccounted for in the previous two months. The US labor market is alive and kicking.

US Non-Farm Payrolls: Surprising strength in employment

US economy added 128,000 jobs in October, beating the 89,000 forecast. Positive revisions to August and September totaled 95,000. General Motors strike subtracted between 46,000 and 80,000 from payrolls. The US economy has turned in another bang-up employment report. Belying estimates of the first sub-100,000 report since May and rumours of a negative number US firms added 128,000 workers in October.

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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.