NFP report preview

Today April 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 –

• The headline number for total hires last month was 103,000. April ADP employment number was encouraging at 204,000 after February’s highly encouraging 226,000.

• Today payrolls are expected at 195,000.

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

• The labor force participation rate is showing some signs of rebound. It was at 62.9 percent, in the last report. It is expected to rise gradually to 63.5 percent.

• The unemployment rate is expected to decline to 4 percent from current 4.1 percent.

• The underemployment rate is expected to improve further from current 8 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 215,000) and wage growth could lead to further gains in the dollar which has been showing strength lately.

• The dollar could suffer setback along with U.S. equities on a materially weak report of headline below 160,000. The dollar index is currently trading at 92.43, up 0.01 percent so far today.