NFP report preview – all about headline

Today NFP report is to be published at 13:30 GMT from US.

What is NFP report?

• NFP or non-farm payroll report is the monthly statistics on labor condition in the US released by US department of labor statistics. The report comprises goods, construction and manufacturing sector companies.
• This report influences the financial markets deeply across asset class.

Key highlights -

• Headline number for total hires last month was 142,000. September ADP employment number was better than expected and robust enough at 182,000, marginally lower than 190,000 in September.
  
  
• Today payrolls are expected at 180,000.
  
  
• Second most vital component is wage growth, which is lagging, in spite of solid job gains for the past two years. Last report showed wage growth was 2.2%
  
  
• Labor force participation rate is showing no signs of rebound. It was at 62.4%, in last report. It has actually weakened over the past year.
  
  
• Unemployment rate is expected to remain at 5.1%.
  
  
• Underemployment rate is expected to fall below 10%.

Impact -

• Volatility is sure to be on the card, post release.
  
  
• Any number above 200,000 would be considered as very good and expectations for FED rate hike should move up.
  
  
• Any number above 160,000 should be enough to sustain rate hike expectations.
  
  
• However, a drop below last month's payroll could again raise fresh doubts over rate hike.

Better than expected wage growth would be additional boost for Dollar.

FXCM US Dollar index is currently trading at 12130, highest level since April this year.