NonFarm Payrolls

Nonfarm Payrolls show loss of -140K jobs

US jobs report post-release checklist – Jan 8th, 2020

NFP Actual, Consensus and Deviation NegativeThe US economy lost 140K jobs in December, much worse than the 71K gain expected.
NFP Revisions PositiveNovember figure revised upwards from 245K to 336K.
Unemployment ratePositive

U3 unemployment rate stayed at 6.7, better than the 6.8% expected. U6 underemployment rate down a tad from 12% to 11.7%.

Labor Force Participation Rate NeutralThe share of people in the workforce remained stable at 61.5%.
Average Hourly EarningsPositiveBoth the yearly (5.1%) and the monthly (0.8%) wage growth figures bettered expectations (4.4% and 0.2% respectively), as the lost jobs were mostly underpaid.


US jobs report pre-release checklist – Jan 8th, 2020

Previous Non-Farm Payrolls Negative The US economy added 245K jobs in November, nearly just half of expectations and accelerating the downtrend of the post-pandemic labor market recovery.
Challenger Job Cuts Negative The number of corporate layoffs increased in December, with 77K jobs lost from 64.8K in November. 
Initial Jobless Claims Negative First-time employment claims 4-week average has been on the rise for the last two releases, back above 800K, showing the worsening condition of US job market.
Continuing Jobless Claims Positive The downtrend of unemployment-benefit claimants seems relentless, falling below 5.5 million for the first time since COVID-19 halted the economic activity.
ISM Services PMI Negative The labor sub-index in the US main service survey decreased back to contraction territory, below 50 levels, the worst figure in the last four months.
ISM Manufacturing PMI Positive The employment sub-index in the US main manufacturing survey bounced back to above 50 levels in December, back in expansion territory.
University of Michigan Consumer Confidence Index Negative The 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 Negative The Conference Board Consumer Confidence Index® registered its third consecutive negative month, back below 90, showing that US consumers are still wary of spending too much.
ADP Employment Report Negative
Private sector employment printed a dismal 123K loss of jobs in December, hinting at a dismal NFP figure for the same month.
JOLTS Job Openings Positive Hiring recovered in the last JOLTS release (October), although the lagging nature of this indicator makes it less decisive for evaluating NFP. 




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.