Will the NFP numbers released this Friday shock investors?

Oct 5 • Mind The Gap • 144 Views • No Comments

As always, there’s plenty of reference to the upcoming NFP numbers in the financial mainstream press this week. But most analysts appear to be missing the elephant in the room; the incredibly low forecast of 80k to 90k, depending on whether Reuters, or Bloomberg economists are quoted. The good news is that this figure has been revised upwards, from the 50k being quoted last week, however, if the forecast is met, it would represent the lowest NFP figure posted since June 2016, when only 38k new jobs were registered. In fact, a quick reference over the past three years NFP prints, reveals that only three times in 44 months, has a figure below 100k been registered.

Over recent months the release of the NFP number hasn’t caused the fireworks witnessed in previous years, analysts who’ve observed this week’s low prediction are considering if this Friday we may finally witness some significant price action, not only if the forecast comes in on target, but also if it beats the forecast and given how low the consensus figure is, this is a distinct possibility.

The private payroll firm ADP published its latest monthly job creation figure on Wednesday, which came in (as forecast) at 135k, quite a reduction from the previous month’s figure of 228k, which also missed the forecast of 230k+. On Thursday we’ll receive the latest Challenger job losses data and the data regarding the new weekly jobless claims and continuous claims from the Bureau of Labour Statistics (BLS), last week’s claims rose to come in at 272k. Taken as a collective this cluster of data readings may provide clues as to where the NFP number will come in on Friday, when the publication is released at 12:30pm GMT time.

KEY RELEVANT USA ECONOMIC DATA

• GDP 3.1%
• Unemployment 4.4%
• Initial jobless claims 272k
• Inflation 1.9%
• Interest rate 1.25%
• NFP August 156k
• ADP change 135k
• Wage growth 2.95%
• Retail sales growth YoY 3.2%
• Government debt v GDP 106%

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