On Friday February 2nd, at 13:30pm GMT (U.K. time), the BLS in the United States (bureau of labour statistics) will deliver the latest January NFP number; the non-farm payroll release reveals the amount of jobs created in the U.S. in a particular month, the tradition is for the number to be published the first Friday of the following month. Non-farm payrolls in the United States increased by 148 thousand in December of 2017, below market expectations of the forecast of 190 thousand. Despite this miss, analysts and investors shrugged off the news, as equity markets continued their rally.
The positive analysis and reaction appeared to take into context the promising November jobs added; payrolls increased by 228 thousand in November of 2017, after the revised 244 thousand in October, beating the forecast of 200 thousand. In 2017 as a whole, payroll employment growth increased by 2.1 million, versus an increase of 2.2 million in 2016.
The expectation for January is for 182 thousand jobs to have been created in January, this would be below the average 206 thousand created each month in the final quarter of 2017, but obviously represent an improvement on December’s job creation number. By contrast January 2017 witnessed an NFP number of 216 thousand and a February print of 232 thousand.
Given the relatively stable employment situation in the USA over recent years, the NFP number has not recently moved markets significantly when it’s published, whilst the unemployment number at 4.1% has also remained stable over recent months and represents a decade’s low figure. Traders and investors have tended to look upon the NFP number in context with other jobs data, in order to gauge an overall reading with regards to economic health. Therefore the other statistics published with NFP; labour force participation rate, hourly earnings and hours worked, can provide investors and analysts with a wider perspective, as can the ADP job creation number and the Challenger job cuts reading, both metrics are published earlier in the week, ahead of the NFP number.
KEY USA ECONOMIC INDICATORS RELEVANT TO THE RELEASE
• GDP YoY 2.5%.
• GDP QoQ 2.6%.
• Inflation rate 2.1%.
• Interest rate 1.5%.
• Jobless rate 4.1%.
• Govt debt v GDP 106%.
• Labour force participation rate 62.7%.
