NonFarm Payrolls

Non-Farm Payrolls data reflecting coronavirus crisis

US jobs report post-release checklist – Mar 6th, 2020

NFP Actual, Consensus and Deviation PositiveVery upbeat headline figures, with 273K job gain in February, way over 175K expectations.
NFP Revisions PositiveJanuary job growth number was revised upwards, from 225K to 273K.
Unemployment rateNeutral

U3 unemployment rate went down from 3.6% to 3.5%, but U6 underemployment rose a bit, from 6.9% to 7.0%.

Labor Force Participation Rate NeutralThe share of people in the workforce stayed at 63.4% in February.
Average Hourly Earnings NeutralMixed figures in the wage data, with the yearly figures (3.0%) coming down while the monthly ones going up a tad (0.4%). 



US jobs report pre-release checklist – Mar 6th, 2020

Previous Non-Farm PayrollsPositiveJanuary was a positive month for the US labor market, with a 225k job gain. The number comfortably beat expectations, triggering a +1.52 deviation number.
Challenger Job CutsNeutralThe number of corporate layoffs in February as 56.66K, down from the 67.735K figure of January but still on the high-end of the recent range. 
Initial Jobless Claims NegativeThe 4-week moving average in the Initial Jobless Claims seems to have found a bottom, ticking up from below 210K to 213K in the last release.
Continuing Jobless Claims PositiveThe number of individuals claiming unemployment benefits is still close to all-time lows, showing no rising signs.
ISM Non-Manufacturing PMI PositiveThe employment index in the main US service-sector business survey has risen to 55.6, the highest figure since last August.
ISM Manufacturing PMI PositiveEmployment sub-component in the ISM Manufacturing PMI ticked a bit higher, from 46.6 to 46.9, the second consecutive rise, but still in contraction territory.
University of Michigan Consumer Confidence Index PositiveUMich consumer survey shows unfazed confidence in its February reading, as the index has risen above 100 for the first time since September 2018.
Conference Board Consumer Confidence Index NeutralCB consumer survey is stable around a healthy 130 level, not showing much change in the last couple of months.
ADP Employment Report Neutral
The private payroll survey showed a 183K job gain in February, beating the 170K expectation. January's figures were revised down from 291K to 209K, though.
JOLTS Job Openings NegativeJob openings have been notably cut down in the last couple of releases: from 7.36M in October down to 6.42M in December, the last month reported. 



US payrolls rocket higher, wages gains return to form

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.



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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.