The Non-Farm Payrolls was expected to be a "normal" one with 192,000 jobs gained and wages rising by 0.2% MoM and 2.7% YoY.
MAY US JOBS REPORT
US jobs report post-release checklist – May 4th, 2018
|NFP Actual, Consensus and Deviation||Negative||Slightly negative surprise from 192K expected the actual result was 164K.|
|NFP Revisions||Positive||Revised up from 103K to 135K.|
|Unemployment Rate||Positive||A decrease from 4.1 to 3.9 (expected was 4.0%) is seen as positive.|
|Labor Force Participation Rate||Negative||Decreased 0.1%.|
|Average Hourly Earnings||Negative||A print of 2.6% vs. 2.7 expected and a downward revision is seen as negative.|
US jobs report pre-release checklist – May 4th, 2018
|Previous Non-Farm Payrolls||Negative||103k versus 193k expected (deviation was -1.54).|
|Challenger Job Cuts||Positive||The number of jobs' layoffs came down from 60.357k in March to 36.081k in April.|
|Initial Jobless Claims||Neutral||Initial Jobless Claims were 211k this week, less than the 225k expected but still a bit more than 209k from last week.|
|Continuing Jobless Claims||Positive||Continuing Jobless Claims were 1.756M, less than expected (1.838M) and a positive change from last month (1.833M).|
|ISM Non-Manufacturing PMI||Negative||The employment sub-component registered 53.6 in Apr., a decrease of 3% from the March reading. It's still expanding, though.|
|ISM Manufacturing PMI||Negative||The employment sub-component registered 54.2 in Apr, a decrease of 3.1 percentage points when compared to the Mar reading of 57.3.|
|University of Michigan Consumer Confidence Index||Positive||A higher reading for the month of Apr hints at consumer exuberance which translates into greater spending.|
|Conference Board Consumer Confidence Index||Positive||The index increased in Apr, following a decline in March which stimulates economic expansion.|
|ADP Employment Report||Neutral||A higher than expected print at 204K (vs. 200K expected) but down from last month 241K did not surprise the market to the upside.|
|JOLTS Job Openings||Negative||A lower reading at 6.052M from 6.228M (revised from 3.12M) indicate companies pulling back on job postings.|
Well, today is your lucky day the FXStreet team has been working on a research material to make you an expert in trading the NFP report.
Considered the backbone of the U.S. economy, the NFP has
Since the headline number for NFP tends to move all financial markets, as a trader it is important that you prepare for various scenarios, by developing models to predict the likely headline number and to trade the outcome.
Ready to make a leap and become an NFP expert?
The Nonfarm Payrolls report: The most important economic indicator for the US
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
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.