NonFarm Payrolls

Impressive Nonfarm Payrolls growth in September confirms tight labor conditions

US jobs report post-release checklist – October 6

NFP Actual, Consensus and Deviation Positive US employers added 336,000 payrolls in September, the highest increase since January and well above expectations of 170,000 jobs created.
NFP Revisions Positive Net revisions from the previous two months, July and August, show that the US economy added 119,000 jobs more than previously estimated.
Unemployment rate Neutral The US Unemployment Rate remained unchanged at 3.8%. Economists expected a slight decline to 3.7%.
Labor Force Participation Rate Neutral The participation rate, a gauge of the active workforce, remained unchanged at 62.8%.
Average Hourly Earnings Negative Annual wage growth cooled further in September to 4.2% against expectations of a steady growth pace. On a monthly basis, earnings rose 0.2%, the same rate as in August and less than the 0.3% rise economists had expected.



US jobs report pre-release checklist – October 6

Previous Non-Farm Payrolls NeutralUS employers added 187,000 payrolls in August, below the key 200K mark, but more than the 170,000 expected and increasing from the 157,000 jobs created in July.
Challenger Job Cuts NeutralEmployers announced 47,457 job cuts in September, well down the 75,000 figure seen a month earlier but still above the around 30,000 cuts announced the same month a year earlier.
Initial Jobless Claims  PositiveThe number of people filing to receive unemployment benefits for the first time has edged further down. The 4-week moving average until September 29 was at 208,750, signaling a strong labor market.
Continuing Jobless Claims  PositiveOverall claims fell slightly to 1.664 million in the week ending September 22, remaining near the low levels seen in the last month.
ISM Services PMI   NeutralThe ISM Services PMI data for September suggested that the sector expanded at a slower pace. The Employment component continued to indicate job creation, but less so than in the previous month.
ISM Manufacturing PMI  PositiveThe ISM Manufacturing PMI data for September pointed to a marginal contraction in factory activity, but the Employment component rebounded significantly, suggesting firms added more employees to their workforce.
University of Michigan Consumer Confidence Index   NeutralThe University of Michigan consumer sentiment for the US edged down slightly to 68.1 in September from 69.5 in August. Still, confidence is up by 16% compared to the same month a year earlier.
Conference Board Consumer Confidence Index   NeutralThe Conference Board Consumer Confidence Index deteriorated to 103.0 in September from 108.7 in August. Still, consumers’ assessment of current labor market conditions was slightly more positive.
ADP Employment Report  NegativeADP’s gauge of private-sector employment rose by 89,000 jobs in September, less than the 153,000 increase expected and down sharply from the 180,000 jobs added in August.
JOLTS Job Openings  PositiveJob openings in the US unexpectedly rebounded sharply to 9.61 million in August, in a sign of resilient labor demand and tight job market conditions.








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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.