NonFarm Payrolls


December US JOBS REPORT REVIEW


US jobs report post-release checklist – Dec 6th, 2019

NFP Actual, Consensus and Deviation PositiveTremendous beat as job creation in November at 266K, with a very meaningful +2.57 deviation figure.
NFP Revisions PositiveOctober figure also revised higher, from 128K to 156K.
Unemployment ratePositiveBoth U3 (from 3.6% to 3.5%) and U6 (from 7% to 6.9%) figures went down, another positive development.
Labor Force Participation Rate NegativeUnexpectedly retraced back from 63.3% to 63.2%.
Average Hourly Earnings NeutralYearly wage figures printed a better-than-expected 3.1% growth, while the monthly number disappointed (0.2% vs. 0.3% expected). 

 


December US JOBS REPORT PREVIEW


US jobs report pre-release checklist – Dec 6th, 2019

 
Previous Non-Farm PayrollsNeutralHeadline number at 128k beat very modest expectations, but decreased from the previous reading (180k).
Challenger Job CutsPositiveThe number of corporate layoffs went down in October to 44.569K from just over 50K in September.
Initial Jobless Claims PositiveThe number of first-time unemployment claimants has diminished for the last couple of weeks, from 228K to 203K.
Continuing Jobless Claims NegativePeople receiving unemployment benefits has increased in the last week, from 1.624M to 1.693M. Overall, five of the last seven releases have disappointed expectations.
ISM Non-Manufacturing PMI PositiveDespite a disappointing generic reading, the employment sub-component in the ISM Non-Manufacturing PMI improved in November to 55.5, from 53.7 in October.
ISM Manufacturing PMI NegativeEmployment sub-component in the ISM Manufacturing PMI disappointed for the third month in a row, printing a modest 46.6, way into contraction territory.
University of Michigan Consumer Confidence Index PositiveUMich consumer survey continued its recovery in November, ticking up to 96.8, the fourth consecutive increase.
Conference Board Consumer Confidence Index NegativeCB consumer survey showed a small retracement from 126.1 to 125.5, also failing to match the expectations, which were forecasting a surge to the 127 mark.
ADP Employment Report Negative
The leading indicator most correlated with the headline NFP number printed a dismal 67K reading, well below 140K expectations.
JOLTS Job Openings NegativeJob openings fell below expectations in September, printing 7.024 million labor vacancies, the third consecutive month with a number below expectations.

 

November US JOBS REPORT REVIEW

NFP Quick Analysis: Greenback comeback set to extend, still the cleanest shirt in a dirty pile

The world's largest economy gained 128,000 jobs in October, better than 89,000 projected. Low estimated is the result of the strike at General Motors, which caused a significant drop in manufacturing jobs. The best news come from the revisions – October's gains come on top of 95,000 job gains previously unaccounted for in the previous two months. The US labor market is alive and kicking.

US Non-Farm Payrolls: Surprising strength in employment

US economy added 128,000 jobs in October, beating the 89,000 forecast. Positive revisions to August and September totaled 95,000. General Motors strike subtracted between 46,000 and 80,000 from payrolls. The US economy has turned in another bang-up employment report. Belying estimates of the first sub-100,000 report since May and rumours of a negative number US firms added 128,000 workers in October.



October US JOBS REPORT REVIEW

Non–Farm Payrolls: If this is a slowdown we’ll take it

The US economy continued to produce jobs at a healthy rate as unemployment fell to a five decade low and wage growth slowed unexpectedly. Unemployment dropped 0.2% to 3.5% as the economy created 136,000 new jobs in September and added 45,000 in prior months, reported the Bureau of Labor Statistics on Friday. Annual wages rose 2.9% and the jobless rates for Hispanics and African-Americans registered all-time lows. Consensus estimates had been for payrolls of 145,000.


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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.