NonFarm Payrolls

US labor market cools down in February with an NFP increase of 151K

US jobs report post-release checklist – March 7

NFP Actual, Consensus and Deviation Negative US Nonfarm Payrolls rose by 151,000 in February, following the 125,000 increase recorded in January and falling short of the market expectation of 160,000.
NFP Revisions Neutral The change in total Nonfarm Payroll employment for December was revised up by 16,000, from +307,000 to +323,000, and the change for January was revised down by 18,000, from +143,000 to +125,000. With these revisions, employment in December and January combined is 2,000 lower than previously reported.
Unemployment rate Negative The US Unemployment Rate edged higher to 4.1% in February from 4% in January.
Labor Force Participation Rate Negative The Labor Force Participation Rate declined to 62.4% in February from 62.6%.
Average Hourly Earnings Neutral Annual wage inflation, as measured by the change in Average Hourly Earnings, rose to 4%, in February from 3.9% (revised from 4.1%) in January.

 

US jobs report pre-release checklist – March 7

Previous Non-Farm Payrolls  NegativeNonfarm Payrolls increased by 143,000 in January, following a 307,000 increase recorded in December and missing the market expectation of 170,000. 
Challenger Job Cuts  NegativeUS-based employers announced 127,071 job cuts in February, a noticeable increase from 49,795 cuts reported in January.
Initial Jobless Claims   NeutralThe four-week average of the number of people claiming unemployment benefits for the first time stood at 224,250 at the end of February. On a positive, weekly Initial Jobless Claims declined to 221,000 in the week ending March 1, from 242,000 in the previous week. 
Continuing Jobless Claims   NegativeContinuing claims rose by 42,000 to 1.897 million in the week ending February 22. 
ISM Services PMI Positive
The headline ISM Services PMI improved to 53.5 in February from 52.8 in January. The Employment subindex rose to 53.9 from 52.3 in the same period, signaling that the service sector continued to add jobs.
ISM Manufacturing PMI        NegativeThe headline ISM Manufacturing PMI dropped to 50.3 in February from 50.9 in January. The Employment Index declined to 47.6 from 50.3, highlighting a contraction in the manufacturing sector’s payrolls.
University of Michigan Consumer Confidence Index  NeutralThe University of Michigan Consumer Sentiment Index declined to 64.7 in January from 71.1 in December.
Conference Board Consumer Confidence Index  NegativeThe Conference Board Consumer Confidence Index declined to 98.3 in February from 105.3. “Consumers' views of current business and job market conditions slipped, with the Present Situation Index dropping by 3.4 points to 136.5.” the publication read. 
ADP Employment Report  NegativePrivate-sector employment rose by 77,000 in February, following the 186,000 increase (revised from 183,000) reported in January and missing the market expectation of 140,000 by a wide margin.
JOLTS Job Openings  NeutralJOLTS Job Openings data for January will be published following the US Bureau of Labor Statistics’ release of the February employment report.

 

January US JOBS REPORT REVIEW

December US JOBS REPORT REVIEW

November US JOBS REPORT REVIEW

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BIG PICTURE

NFP: The most important US economic indicator

NFP Definition

The Nonfarm Payrolls (NFP) report measures the number of jobs added or lost in the US economy over the prior month. It is usually released by the US Department of Labor on the first Friday of each month at 8:30 ET.

The report is important because the US is the largest economy in the world and its currency (the US Dollar) is the global reserve currency. This means that many economies peg their currency's value to that of the USD and many commodities such as Gold and Oil are priced in terms of the Dollar.

The NFP report tends to move all markets: currencies, equities, bonds, commodities and cryptocurrencies. It does so immediately after the release of the economic data and sometimes 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.