A V-shaped recovery? White House adviser Larry Kudlow still touted a rapid bounce as late as two weeks ago – but the shape of the labor market already looks like an L or Nike swoosh. The sharp fall due to coronavirus is turning from a temporary shutdown into more permanent job losses.
Are Non-Farm Payrolls expectations too high or too low? The resurgence of coronavirus, confusing leading indicators, and other factors complicate calculations. Valeria Bednarik, Joseph Trevisani, and Yohay Elam thrash out all the factors and discuss the impact on the dollar and gold.
It’s a confusing time for economists. Forecasts are in greater demand than ever but the data is often contradictory and sometimes plain wrong, making predictions particularly hazardous. The US economy has shed over 20 million jobs since the pandemic began in March.
Things couldn’t be much worse in the US ahead of the release of the monthly Nonfarm Payroll report. A record economic contraction in Q2 coupled with a dovish US Federal Reserve last week, as the central bank remained on hold and passed the ball to lawmakers, which, by the way, can’t found common ground to agree on a new coronavirus aid-package.
The US economy gained 4.8 million jobs in June, better than expected. Data is from early June when the US economy was reopening at a rapid pace. A raging second wave of coronavirus cases is set to hit employment, including in the long term.
US Non-Farm Payrolls surprised to the upside once again, but doubts about the sustainability remain prevalent. Valeria Bednarik, Joseph Trevisani, and Yohay Elam discuss the market reaction, the state of coronavirus, politics, and more as a hot summer begins. Are the plumbers making progress?
Shocker – but a positive one – America is getting back to work, or at least receiving support while staying at home and remaining officially on the payroll. The Non-Farm Payrolls report for May was initially hard to believe – all those surveyed by Bloomberg and Reuters had foreseen a loss of positions in May and the US gained 2.509 million jobs.
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.
The worst Non-Farm Payrolls report in history – 20.5 jobs lost and an unemployment rate of 14.7% – is shocking but investors were already bracing for disaster. The lockdowns imposed to curb the spread of coronavirus have taken their toll. The headline figures are devastating, but other statistics already paint an even darker picture.
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.
"Like a hurricane hitting the whole country" – one of the reactions to the Non-Farm Payrolls report that showed a loss of 701,000 jobs, seven times worse than expected. The unemployment rate jumped from 3.5% to 4.4%, also worse than expected. It is the worst report since March 2009. The bad news may be only the very beginning, the tip of the iceberg.
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.
The American job market looks great – or at least that was the picture in February. There is nothing not to like in the data. Non-Farm Payrolls rose by 273,000, smashing expectations, while wages advanced by healthy rates of 0.3% MoM and 3% YoY.
The Non-Farm Payroll (NFP) data for February was much better than expected, coming in with 273,000 jobs created vs a revised January number to 273,000 (from 225,000) as well. In addition, the unemployment rate declined to 3.5% in February from 3.6% in January.
EUR/USD dips sub-18 after the US reported an increase of 1.763 million jobs in July, better than estimated but pointing to a deceleration. Escalating Sino-American tensions are boosting the dollar and fiscal talks are eyed.
GBP/USD trades at fresh weekly lows below 1.3050 as the dollar got a sudden boost from mounting tensions between the world's two largest economies. UK Chancellor Rishi Sunak said the furlough scheme that is underpinning the economy cannot last forever.
Crude oil prices continued to fall on Friday and the barrel of West Texas Intermediate (WTI) touched a daily low of $41.05 before recovering modestly.
Gold prices are falling sharply on Friday, trading below $2040/oz at the moment. Earlier on Friday, the yellow metal reached at $2075, a new record high.
Gold retreated from the recent highs, but the sentiments are still bullish. Cryptocurrencies resumed the upside, some altcoins are demonstrating strong gains. ETH/BTC stopped the downside correction and settled at $0.03300.
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.
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.
During NFP data release, spreads first fall apart and recover slowly afterwards as market calms down.
The Non Farm Payrolls report is arguably one of biggest market movers in the Forex. Since the NFP report is scheduled this coming week, I thought it would be good for us to take a closer look at this fundamental giant.
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.
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%.”
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.
