US February non-farm payroll preview

Today NFP report for the month of February is to be published at 13:30 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, as well as the services industry.
• This report influences the financial markets deeply across asset class.

Key highlights –

• Last month’s report was a strong one with 227,000 gains.

• Change in private payroll has been 237,000 last month. Today expected 200,000.

• Total payrolls are expected at 200,000.

• The most vital component is wage growth, which has been showing some strength. Today it is expected to rise by 0.3 percent on monthly basis and 2.7 percent annually.

• Labor force participation rate still subdued at 62.9 percent.

• The unemployment rate is expected to decline by 0.1 percent to 4.7 percent.

• Underemployment rate is expected to fall further from current 9.4 percent

Impact –

• Volatility is sure to be on the card, post release.
   
• Any number above 250,000 would be considered as very good and investors will further push the odds of a rate hike for 2017. As of now, the market is convinced that a rate hike is coming in March, so better jobs report likely to push the expectations for numbers of hikes this year.

• Any number below 170,000 will make investors scratch their heads, especially as the ADP reported solid gains.

A better report would be better for equities and especially for different sectors. Higher jobs gains in the energy sector likely to be dampening factor for the oil price.

Overall, the jobs report is unlikely to be a mega mover for the dollar. The dollar index is currently trading at 101.88, down 0.15 percent for the day.