NFP report preview

Today December NFP report is to be published at 13:30 GMT from the United States.

What is the 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 the asset class.

Key highlights –
 

• The headline number for total hires last month was 155,000. December ADP employment number was strong with hiring at 271,000.
   
• Today payrolls are expected at 180,000.
   
• The second most vital component is wage growth which as of now is showing very healthy growth of 3.1 percent. Today expected at 3.1 percent y/y.
   
• Labor force participation rate is very low at 62.9 percent.
   
• The unemployment rate is expected to remain the same at 3.7 percent.
   
• The underemployment rate is expected to improve further from the current 7.6 percent.
   
• Average weekly hours were previous 34.4; a slight change to 34.5 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 250,000) and wage growth might support the declining dollar.
   
• The dollar could suffer setback along with U.S. equities on a materially weak report of headline below 150,000. The dollar index is currently trading at 96.18, down 0.09 percent so far today.