Non-farm payrolls are expected to have increased by 219,000 last month, with many market analysts expecting another strong month for jobs. We had a massive 288,000 jobs added in April, beating the most optimistic views. Analysts expect that the May report will continue the strong trend in new jobs, adding to wider speculation that we could see the highest level of new jobs created since the recession ended in 2014. The U.S. economy is expected to surpass 200,000 new jobs added for the fourth straight month. A lot of traders look for NFP forecast misses, to create volatility from which money can be made. However, this month, market commentators expect it to be a less volatile affair than last month. Where the consensus last was 210,000 and the jobs number came in at 288,000.
The non-farm payrolls will be released on Friday 6th June at 13.30 BST.
The general consensus this week is that Non-farm Payrolls are expected to have increased by 219k with an unemployment rate of 6.4%. Analysts will also be factoring in this week’s other significant jobs data for a more accurate forecast for Fridays NFP report. Please note that all reports are not equal, as some of the data provided in the other reports are not in the range of the NFP report. Thursday 5th June 13.30 BST – Unemployment Claims – The Initial jobless claims came in above expectations at 312,000 for May, just two thousand off the 310K consensus. However, even as a seemingly insignificant increase, this number could put questions marks above the strength of tomorrow’s report.
Non-Farm Payrolls Explained
The U.S Non-Farm Payrolls report is one of the most widely anticipated economic reports for global traders. The report is released on the first Friday of the month by the Bureau of Labour Statistics and measures how many jobs were created or destroyed in the United States over the period of a month. This report also filters data on employment in all the different sectors of the economy, the average work week and average hourly earnings. The Non-Farm Payroll report is also the source of the official unemployment rate for the US, and records information of adults (16+) looking for employment in all the different sectors of employment. The data for Non-Farm Payrolls is analysed very closely because it holds great importance when identifying many factors in the financial markets, for example data is used to measure economic growth and inflation. The forex market is heavily impacted by the level of actual non-farm payroll compared to payroll estimates. If the data comes in lower than estimated, forex traders will often sell the US dollar as they anticipate a weakening currency. If the numbers come in higher than expected the opposite would occur. Changes in the workforce in reflection to the overall population of the country, explain why the unemployment rate occasionally goes down even when jobs are lost and why the unemployment rate can rise despite an increase in jobs.
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