NFP report preview

Today April 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 –

• The headline number for total hires last month was 211,000. May ADP employment number rose to 253,000 after April’s disappointing 177,000.

• Today payrolls are expected at 180,000.

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

• The labor force participation rate is showing no signs of rebound. It was at 62.9%, in the last report.

• The unemployment rate is expected to remain same at 4.4 percent.

• The underemployment rate is expected to improve further from current 8.6 percent.

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

Impact –

• The immediate impact is usually very volatile and today could be more as the market is already agitated by US withdrawal from climate agreement.

• A strong report especially the headline number and wage growth could lead to a recovery in the dollar which is weak despite expectations of a June hike. However, UK election positioning could keep a lid on the dollar.

• Dollar selloffs would accelerate on a materially weak report of headline below 150,000.