NonFarm Payrolls

NFP: How fast is America rehiring workers?

US jobs report pre-release checklist – Feb 5th, 2021

Previous Non-Farm PayrollsNegativeThe US economy lost 140K jobs in December, way worse than the 71K gain expected, derailing the post-pandemic job market recovery.
Challenger Job CutsNeutralCorporate layoffs in the United States have stabilized just below 80K per month in the last two releases, just a bit over the usual pre-pandemic levels. 
Initial Jobless Claims NeutralFirst-time employment claims 4-week average has stabilized above 800K, halting the job recovery despite five of the last seven releases bettering expectations.
Continuing Jobless Claims PositiveThe unemployment-benefit claimants' downtrend is still relentless, falling below 5 million for the first time since COVID-19 halted the economic activity.
ISM Services PMI PositiveThe labor sub-index in the US main service survey rallied in January to 55.2, the highest level since last February.
ISM Manufacturing PMI PositiveThe employment sub-index in the US main manufacturing survey keeps rising, hitting 52.6 in January, the highest level since June 2019.
University of Michigan Consumer Confidence Index NegativeThe UMich consumer sentiment survey has remained stuck around the 80 mark since the pandemic struck, way below pre-covid levels.
Conference Board Consumer Confidence Index NeutralThe Conference Board Consumer Confidence Index® improved a bit in January from 88.6 to 89.3 but is still below 90, close to the post-covid bottom.
ADP Employment Report Positive
Private sector employment bounced back in January, back in positive territory as it printed a 174K job gain. It is only the second better-than-expected release in the last seven for this highly correlated to NFP indicator.
JOLTS Job Openings PositiveHiring recovered in the last JOLTS release (October), although the lagging nature of this indicator makes it less decisive for evaluating NFP. 



US jobs report post-release checklist – Feb 5th, 2021

NFP Actual, Consensus and Deviation NegativeThe US economy just added 49K jobs in January, slightly worse than the 50K expected.
NFP Revisions NegativeDecember figure revised downwards from -140K to -227K.
Unemployment ratePositive

U3 unemployment rate went down to 6.3%, better than the 6.7% expected. U6 underemployment rate down from 11.7% to 11.1%.

Labor Force Participation Rate NegativeThe share of people in the workforce decreased a tad from 61.5% to 61.4%.
Average Hourly EarningsNeutralYearly wages stayed at 5.4%, bettering 5.1% expectations, while monthly figures disappointed with 0.2%, worse than 0.3% expected.





NFP Quick Analysis: Stocks set to fall as sub 8% jobless rate lowers chances for stimulus

Positive for COVID-19 – the new about President Donald Trump's trumps everything, even the critical jobs report. The worrying news about the leader of the world's most powerful country has been grabbing the headlines. Yet as seen earlier in the week, investors' immediate concerns are around the next fiscal relief package. Optimism about a Republican-Democrat deal boosted stocks and pessimism sent it down.


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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.