NonFarm Payrolls


September US JOBS REPORT REVIEW

NFP Quick Analysis: Americans get a big raise – USD may follow

America gets an upbeat pay rise – 0.4% on average – better than expected – and significantly above-average increase. On an annual basis, salaries are up 3.2%, also beating projections. Additional disposable income in Americans' pockets may result in further spending in price pressures. An acceleration in wage inflation may push prices higher.

US: Nonfarm payrolls increased by 130K in July vs. 158K expected

The US Bureau of Labor Statistics on Friday reported that Nonfarm Payrolls in August increased by 130,000 following July's reading of 159,000 (revised from 164,000) and came in weaker than the market expectation of 158,000. With the initial reaction, the US Dollar Index edged lower and was last down 0.02% on the day at 98.35.

US jobs report post-release checklist – Sep 6th, 2019

NFP Actual, Consensus and Deviation NegativeHeadline number at 130k disappointed, worse than 158k expected.
NFP Revisions NegativeSlight down revision from 164k to 159k.
Unemployment rateNeutralNumber unchaged.
Labor Force Participation Rate PositiveContinues its upward trend growing from 63% to 63.2%.
Average Hourly Earnings PositiveBoth yearly and monthly wage figures beat expectations, with the YoY revision also coming improved.

US jobs report pre-release checklist – Sep 6th, 2019

 
Previous Non-Farm PayrollsNeutralMatched expectations at 164K jobs added.
Challenger Job CutsNegativeNumber of corporate layoffs increased notably in August from 38.845K to 53.480K.
Initial Jobless Claims Neutral4-week average of the first-time unemployment claimants is stable around 215K, very close to multi-year lows.
Continuing Jobless Claims NeutralNumber of people filing for unemployment benefits continues to be quite stable around 1.7 million, also close to multi-year lows.
ISM Non-Manufacturing PMI NegativeThe employment subcomponent in the very important service sector survey fell from 56.2 to 53.1.
ISM Manufacturing PMI NegativeFalling from 51.7 in July  to 47.4 in August is a big disappointment on the employment subcomponent of the very important manufacturing business survey.
University of Michigan Consumer Confidence Index NegativeUMich consumer survey plunged below 90 in August, falling nearly 10 points in one month, an awful reading.
Conference Board Consumer Confidence Index PositiveThe Conference Board Consumer Confidence Index® stayed at higher-than-135 levels in August, a better-than-expected number.
ADP Employment Report PositivePrivate employment report showed a pick up on job creation in August, adding 195K (much better than 149K expected).
JOLTS Job Openings PositiveJob openings beat expectations in June, printing 7.348 million above the 7.317 million expected. Revised figure for May was also bullish.

 


AUGUST US JOBS REPORT REVIEW



JULY US JOBS REPORT REVIEW

US jobs report post-release checklist – Jul 5th, 2019

NFP Actual, Consensus and Deviation Positive Beats expectations with 224k, recovering the healthy bigger-than-200k job creation pace.
NFP Revisions Negative Last month dismal headline report was slightly revised down from 75k to 72k.
Unemployment Rate Negative Unexpectedly rose a tick from the record-low 3.6% to 3.7%.
Labor Force Participation Rate Positive Rises a tick from 62.8% to 62.9%, a positive development.
Average Hourly Earnings Negative Both monthly and yearly figures printed stable wage-growth ratios, unable to rise a tick to 0.3% and 3.2% as expected.

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BIG PICTURE

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.