NonFarm Payrolls


Nonfarm Payrolls rise 256,000 in December, reaffirming Fed's cautious approach to rate cuts

US jobs report post-release checklist – January 10

NFP Actual, Consensus and Deviation Positive US Nonfarm Payrolls rose by 256,000 in December, following the 212,000 increase recorded in November and surpassing the market expectation of 160,000 by a wide margin.
NFP Revisions Neutral The change in total Nonfarm Payrolls for October was revised up by 7,000, from +36,000 to +43,000, and the change for November was revised down by 15,000, from +227,000 to +212,000.
Unemployment rate Positive The US Unemployment Rate edged lower to 4.1% in December from 4.2% in November.
Labor Force Participation Rate Neutral The Labor Force Participation Rate was unchanged at 62.5% in December.
Average Hourly Earnings Neutral Annual wage inflation, as measured by the change in Average Hourly Earnings, declined to 3.9% in December from 4%.

 

US jobs report pre-release checklist – January 10

Previous Non-Farm Payrolls  PositiveNonfarm Payrolls increased by 227,000 in November, surpassing the market expectation of 200,000 and sharply up from the 36,000 jobs created in October. 
Challenger Job Cuts  PositiveUS-based employers announced 38,792 job cuts in December, a noticeable decrease from 57,727 cuts reported in November.
Initial Jobless Claims   PositiveThe number of people claiming unemployment benefits for the first time came in at 211,000 and 201,000 in the last two weeks of the year. 
Continuing Jobless Claims   NeutralContinuing claims stood at 1.867 million in the week ending December 28, an increase of 33,000 from the previous week's revised level.
ISM Services PMI Positive
The headline ISM Services PMI improved to 54.1 in December from 52.1 in November. The Employment subindex came in at 51.4, signaling that service sector continued to add jobs in this period.
ISM Manufacturing PMI        NegativeThe headline ISM Manufacturing PMI rose to 49.3 in December from 48.4 in November but the Employment subindex declined to 45.3 from 48.1, reflecting a contraction in the manufacturing sector’s payrolls.
University of Michigan Consumer Confidence Index  NeutralThe University of Michigan Consumer Sentiment Index edged higher to 74 in December from 71.8 in November.
Conference Board Consumer Confidence Index  NeutralThe Conference Board Consumer Confidence Index dropped to 104.7 in December from 112.8 in November. The publication, however, showed that consumer views of current labor market conditions continued to improve.
ADP Employment Report  NegativePrivate-sector employment rose by 122,000 in December, following the 146,000 increase reported in November and missing the market expectation of 140,000.
JOLTS Job Openings  NeutralJOLTS Job Openings stood at 8.09 million on the last business day of November. This reading came in above the market expectation of 7.7 million. Still, the data is backward looking because the upcoming NFP data is for December.

 

November US JOBS REPORT REVIEW


October US JOBS REPORT REVIEW


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.