January non-farm payroll preview

Today NFP report is to be published at 13:30 GMT from 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 292,000. January ADP employment number was better than expected and robust enough at 205,000, however lower than 267,000 in December.
   
• Change in private payroll has been 275,000 last month. Today expected 180,000.
   
• Total payrolls are expected at 190,000.
   
• Second most vital component is wage growth, which is lagging, in spite of solid job gains for the past two years. In last payroll, wages have failed to rise. Today it is expected to rise by 0.3% on monthly basis and 2.2% annually.
   
• Labor force participation rate is showing no signs of rebound. It was at 62.6%, in last report. It has weakened over the past year. And more so since the crisis.
   
• Unemployment rate is expected to remain at 5%.
   
• Underemployment rate is expected to fall further from current 9.9%

Impact -

• Volatility is sure to be on the card, post release.
   
• Any number above 250,000 would be considered as very good and Dollar might have some temporary momentum.

• While number below 150,000 might dent dollar's strength severely, better than expected number may not be a big supporter of Dollar as key remain inflation.

Better than expected wage growth would be key for Dollar's strength. Better payroll can however boost sentiment for equities.

Dollar index is currently trading at 96.65, up 0.1% for the day.