NFP report preview

Today NFP report for the month of May is to be published at 12:30 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 the US Department of labor statistics. The report comprises goods, construction, and manufacturing sector companies.
• This report influences the financial markets deeply across asset class since it is one of the key economic indicators that remain under close vigilance of the U.S. Federal Reserve.

Key highlights –

• The headline number for total hires last month was 263,000. May ADP employment number has been very disappointing at just 27000.

• Today Headline payroll is expected at 175,000.

• The second most vital component is wage growth which has shown very healthy growth of 3.2 percent in the last report. Today expected at 3.2 percent y/y.

• Labor force participation rate is very low at 62.8 percent.

• The unemployment rate is expected to remain the same at 3.6 percent.

• The underemployment rate has declined to 7.3 percent. Vital to watch out for at today’s report.

• Average weekly hours were previous 34.5; no change 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 will definitely push USD higher.

• The dollar could suffer setback along with U.S. equities on a materially weak report of headline below 120,000. The dollar index is currently trading at 97.48, down 0.12 percent so far today.