US: Labour demand slipped way before supply – Standard Chartered

FXStreet Insights Team FXStreet

NFP likely has been overstated since April 2024 by c.60k per month owing to birth-death adjustments. Actual job growth likely was much weaker in 2024 than the market had initially perceived. Labour demand started to soften months ahead of the immigration crackdown, Standard Chartered's economists Steve Englander and Dan Pan report.

2024 wasn’t as golden as it seemed

"Fed Chair Powell noted at the December FOMC meeting that the NFP data is likely being overstated by 60k per month given the upward bias from the BLS birth-death (B-D) adjustment. Our estimate of overstatement is 70k, but we will use Powell’s 60k in this report. Moreover, we agree with Powell that the overstatement has continued beyond the already announced March 2025 preliminary downward benchmark revision."

"Our puzzle is that after all the talk about immigration driving up employment growth, it turns out that 2024 was far from brilliant when revisions are accounted for and we assume the 60k overstatement. The conventional view is that immigration pumped up 2024 employment growth before dropping sharply in 2025. However, our calculation shows that labour demand had slipped way before the immigration crackdown started by the Trump administration."

"After correcting for bias, the ‘actual’ NFP likely averaged 70k between April and December 2024, whereas the initial data releases ran at an average 150k per month. If we use QCEW data and other regression methods to back out nonfarm payroll growth between March and December 2024, we find even bigger downward adjustments."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD falls to near 0.7100 after slipping below 50-day EMA

AUD/USD depreciates after registering minor gains in the previous day, trading around 0.7120 during the Asian hours. The technical analysis of the daily chart shows the pair consolidating sideways within a rectangle pattern, as neither bulls nor bears gain control. The AUD/USD pair is holding a slight bearish tone however as it sits beneath both the nine-day and 50-day EMAs.

160.00: USD/JPY back near intervention territory after upbeat US jobs report

US Nonfarm Payrolls beat expectations by a wide margin in May, with 172K jobs added. The US Dollar rebounds after the release, helping USD/JPY recover from its intraday lows. Warnings from Japanese authorities continue to limit upside potential near the 160.00 threshold.

Gold targets $4,300 amid stronger Dollar

Gold faces increasing selling interest and navigates the area of three-month lows near the $4,300 mark per troy ounce on Friday. The precious metal’s decline comes as traders assess the stronger-than-expected NFP, while the bid bias in the Greenback and higher US Treasury yields also collaborate with the retracement.

Cardano hits five-year low even as Hoskinson clarifies "break" isn't an exit

Cardano (ADA) price is down 10% at press time on Friday, extending losses over 30% so far this week amid Charles Hoskinson's clarification that "break" isn't an exit.

Week ahead – Fed countdown begins amid US inflation data and geopolitical risks

Fed Chair Warsh’s first meeting approaches as key US inflation data could reshape expectations. Oil prices remain elevated as US-Iran talks continue; tariffs also return to the spotlight. ECB is expected to hike; will it be a one-off move or is July live?

The US economy defies the rules: 100 days into the Oil shock and the recession signal is still missing

More than three months after the start of the Iran war and the resulting disruption to global energy markets, the US economy continues to display remarkable resilience. The conflict has triggered a sharp rise in Oil prices, reignited inflationary pressures and fueled widespread concerns about a potential economic slowdown.