NonFarm Payrolls


NFP beats expectaions for sixth straight month in October, wage inflation softens

US jobs report post-release checklist – November 3rd, 2022

NFP Actual, Consensus and Deviation Positive The US economy added 261K K jobs in July, much better than the 200K expected.
NFP Revisions Positive NFP October report revised to 315K from 263K.
Unemployment rate Negative

U3 unemployment rate slightly ingreased to 3.7%, a bit higher than expected, the U6 underemployment came as expected, with 6.8%.

Labor Force Participation Rate Negative The share of people in the workforce has slightly decreased to 62.32.
Average Hourly Earnings Negative Montly change in wages remained at 34.5%, while yearly wages remained around 5% 5%.

 

OCTOBER US JOBS REPORT PREVIEW

US jobs report pre-release checklist – November 3rd, 2022

Previous Non-Farm PayrollsPositiveThe US economy added 263K jobs in July, slightly better than the 250K expected.
Challenger Job CutsNeutral
The number of corporate layoffs slightly increased in September to 33.843K, surging above 30K.
Initial Jobless Claims NegativeThree of the last five weekly unemployment claims releases have been worse than expected, with the week ending on October 28th seeing 217K first-time claimers.
Continuing Jobless Claims NegativeThe number of employment seekers is now around 1.485M, still close to all-time lows.
ISM Services PMI PositiveThe ISM Services PMI came slightly worst than expected with 54.5. 
ISM Manufacturing PMI PositiveThe employment sub-index for the main survey in the US manufacturing sector came at 50.2, better than the 50 expected.
University of Michigan Consumer Confidence Index PositiveUMich survey showed some improvement on October: Is it a turning point or will it remain on this firm downtrend?
Conference Board Consumer Confidence Index Negative

The Conference Board Consumer Confidence Index® decreased in October after back-to-back monthly gains. The Index now stands at 102.5 (1985=100), down from 107.8 in September.

ADP Employment Report Positive
US private-sector employment report cames worst than expected (195K) with 239K in October.
JOLTS Job Openings NegativeThe job openings number falls below 10.053M job offers in October.

 

SEPTEMBER US JOBS REPORT REVIEW


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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.