The big news from the January 2018 jobs report is the annual rise in wages: 2.9%. Salary rises have been drawn to the 2.5% level in the past year. Each time the report showed higher annual increases, the following month saw a disappointing figure and/or a downward revision. All In another case, the report of the accelerated rise in pay was skewed by the hurricanes.
January US Jobs report
US jobs report post-release checklist – February 2nd, 2018
|NFP Actual, Consensus and Deviation||Positive||200k versus 180k expected, but with |
|NFP Revisions||Positive||Revised upwards from 148k to 160k.|
|Unemployment Rate||Neutral||Same reading as previous month at 4.1%|
|Labor Force Participation Rate||Negative||Stays at 62.7% equal to last month but |
|Average Hourly Earnings||Positive||2.09% versus 2.6% expected and prior 2.5% is a positive number (1.24 deviation)|
US jobs report pre-release checklist – February 2nd, 2018
|Previous Non-Farm Payrolls||Negative||Employment growth at 148k new jobs added in December, worse than the 190k expected.|
|Challenger Job Cuts||Negative||Cuts Jump 38 Percent, a bad omen for the job situation and hence for future NFP releases.|
|Initial Jobless Claims||Positive||There was a decrease of 1,000 from the previous week's revised level.|
|Continuing Jobless Claims||Negative||An increase |
|ISM Non-Manufacturing PMI||Positive||The Employment Index increased 1 percentage point in Dec to 56.3 percent from the Nov reading of 55.3%.|
|ISM Manufacturing PMI||Negative||ISM's Employment Index registered 54.2% in Jan, a decrease of 3.9 percentage points when compared to the Dec reading of 58.1%.|
|University of Michigan Consumer Confidence Index||Negative||The Index shows a small decrease from 95.9 in Dec to 94.4 in Jan, also current economic conditions have been evaluated less favorably.|
|Conference Board Consumer Confidence Index||Negative||The Index increased in January, following a decline in December, 125.4 up from 123.1.|
|ADP Employment Report||Positive||Private Sector Employment Increased by 234,000 Jobs in January.|
|JOLTS Job Openings||Neutral||The number of job openings was little changed at 5.9 million on the last business day of November.|
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.
This report, because of its importance to the reserve currency, tends to move all markets: currencies, equities, treasuries, interest rates, and commodities. It does so immediately after the release of the economic data and sometimes dramatically.
US Departament of Labor
The department is led by the U.S. Secretary of Labor, Thomas E. Perez, the highest ranking official of the institution. On March 18, 2013, Perez was nominated by President Barack Obama and took office on July 23 2013 when he was confirmed by the Senate.
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.