NFP report preview

Today March NFP report is to be published at 12:30 GMT from the US.

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 the asset class.

Key highlights –

• The headline number for total hires last month was 20,000. March ADP employment number was disappointing at 129,000 lower than February’s 197,000.

• Today payrolls are expected at 180,000.

• The second most vital component is wage growth which as of now is showing healthy growth of 3.4 percent. Today expected at 3.4 percent y/y.

• Labor force participation rate is showing some signs of a rebound. It was at 63.2 percent, in the last report. It is expected to rise to decline to 62.9 percent.

• The unemployment rate is expected to remain unchanged at 3.8 percent.
   
• The underemployment rate is expected to improve further from the current 7.3 percent.

• Average weekly hours were previous 34.4; expected to increase to 34.5 hours.

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 220,000) and wage growth could lead to a recovery in the dollar which has been struggling recently.

• The dollar selloffs could accelerate on a materially weak report of headline below 140,000. The dollar index is currently trading at 97.3, flat for the day.