NFP report preview

Today June 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 –

• Headline number for total hires last month was 138,000. June ADP employment number was disappointing at 158,000 after May’s encouraging 230,000.

• Today payrolls are expected at 178,000.

• The second most vital component is wage growth which as of now is showing healthy growth of 2.5 percent. Today expected at 2.6 percent y/y.

• Labor force participation rate is showing no signs of rebound. It was at 62.7%, in last report.

• The unemployment rate is expected to remain same at 4.3 percent.

• The underemployment rate is expected to improve further from current 8.4 percent.

• Average weekly hours were previous 34.4; No major change is expected.

Impact –

• Immediate impact is usually very volatile and today could be more as the market is already agitated by yesterday’s weak ADP number.

• A strong report especially the headline number and wage growth could lead to a recovery in the dollar which is weak since the ADP report yesterday.

• Dollar selloffs would accelerate on a materially weak report of headline below 150,000. The dollar index is currently trading at 95.76, up 0.19 percent6 so far today.