NFP report preview

Today January NFP report is to be published at 12:30 GMT from the 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 –

• HThe headline number for total hires last month was 313,000. March ADP employment number was very encouraging at 241,000 after February’s highly encouraging 246,000.

• Today payrolls are expected at 190,000.

• The second most vital component is wage growth which as of now is showing healthy growth of 2.6 percent. Today expected at 2.7 percent y/y.

• The labor force participation rate is showing some signs of rebound. It was at 63 percent, in the last report. It is expected to rise to 63.5 percent.

• The unemployment rate is expected to decline to 4 percent.

• The underemployment rate is expected to improve further from current 8.2 percent.

• Average weekly hours were previous 34.5; no changes expected today.

Impact –

• The immediate impact is usually very volatile and likely to affect the majority of the asset classes.

• A better than expected report especially the headline number (above 245,000) and wage growth could lead to a recovery in the dollar which has been struggling recently.

• The dollar selloffs could accelerate on a materially weak report of headline below 160,000. The dollar index is currently trading at 90.49, up 0.04 percent so far today.