NonFarm Payrolls

Nonfarm Payrolls Data Release

US jobs report post-release checklist – Feb 7th, 2020

NFP Actual, Consensus and Deviation PositiveUpbeat headline figure with a 225K job gain in January, better than 160K expected, triggering a notable +1.52 deviation.
NFP Revisions NeutralDecember's figure was meagerly revised upwards, from 145K to 147K.
Unemployment rateNegative

Both U3 (3.6%) and U6 (6.9%) unemployment figures ticked up from record lows.

Labor Force Participation Rate PositiveThe share of people in the workforce rose to 63.4% in January, clearly better than the 63.1% expected.
Average Hourly Earnings NeutralMixed figures in the wage data. with the yearly figures (3.1%) beating expectations while monthly ones disappointing them (0.2%). 

 

February US JOBS REPORT REVIEW

US payrolls rocket higher, wages gains return to form

Joseph Trevisani
FXStreet

The US economy began the New Year in fine fashion creating far more employment in January than forecast and bringing wages to their longest string of gains since the financial crisis. Non-farm payrolls added 225,000 new positions, well beyond the 160,000 median estimate with warm weather in much of the country enabling 44,000 construction jobs, more than double last year’s monthly average of 12,000, according to Labor Department data on Friday. Revisions for November’s totals added 5,000 to 256,000 and December 2,000 to 147,000.

US jobs report pre-release checklist – Feb 7th, 2020

Previous Non-Farm PayrollsNegativeDecember's 145K job growth disappointed a bit, triggering a -0.47 deviation. November's outstanding figure was also revised slightly down, from 266K to 256K.
Challenger Job CutsNegativeThe number of corporate layoffs went up in January, from 32.843K to 67.735K, the biggest figure in the last 11 months. 
Initial Jobless Claims PositiveThe 4-week moving average for the jobless claims figure has been trending down for the last month, from 224k to a 211.75k average.
Continuing Jobless Claims NeutralThe last four weekly releases for the total number of unemployment claims has been mixed, with two weeks beating expectations and the two others disappointing them.
ISM Non-Manufacturing PMI NegativeEmployment sub-index in the services sector retraced from 54.8 to 53.1, disappointing expectations (55.2) for a higher release.
ISM Manufacturing PMI PositiveEmployment sub-component in the ISM Manufacturing PMI rose a bit, from 45.2 to 46.6, the second rise in the last seven months, but still in contraction territory.
University of Michigan Consumer Confidence Index PositiveUMich consumer survey rose to 99.8 in January, very close to its multi-year highs.
Conference Board Consumer Confidence Index PositiveCB consumer survey went back to the positive track with a 3-point increase in January, from 128.2 to 131.6. Consumer mood is quite optimistic.
ADP Employment Report Positive
ADP private employment report smashed expectations with an enormous 291K job gain in January, the biggest in the last 12 months. This is the most-correlated-to-NFP leading indicator, so it's a huge positive. 
JOLTS Job Openings NegativeJob openings notably decreased in November from 7.36M to 6.8M, the fifth disappointment in the last seven releases. Even if this is a lagging indicator, it shows hiring has slowed down recently. 

 

January US JOBS REPORT REVIEW

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

Yohay Elam
FXStreet

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

Joseph Trevisani
FXStreet

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.