Trading United States Nonfarm Payrolls Report
LATEST HEADLINES FOR THIS NOVEMBER RELEASE
- Federal Reserve Push back on aggressive rate cuts
- Federal Reserve data dependant
- Federal Reserve are expecting unemployment rate to reach 4.4% by December 2024
- JOLTs Job Openings came in lower
- ADP Employment came in higher
- Initial Jobless Claims came in lower
United States Nonfarm Payrolls Forecast Data
- News Prep
- US Nonfarm Payrolls
- US Unemployment Rate
- US Private Payrolls
- US Average Earnings MoM
- US Average Earnings YoY
- Forecast
- 125K
- 4.1%
- 92K
- 0.3%
- 4%
- Previous
- 256K
- 4.1%
- 223K
- 0.4%
- 4%
- Lowest
- 0K
- 4%
- 40K
- 0.2%
- 3.9%
- Highest
- 185K
- 4.2%
- 150K
- 0.5%
- 4.2%
STRONGER PRINT
US Nonfarm Payrolls – Higher than forecast figures
US Unemployment Rate – Lower than forecast figures
- Bullish USD
- Bullish Yields
- Bullish Equities
- Bearish Gold
WEAKER PRINT
US Nonfarm Payrolls – Lower than forecast figures
US Unemployment Rate – Higher than forecast figures
- Bearish USD
- Bearish Yields
- Bearish Equities
- Bullish Gold
BIGGER PICTURE
Labour market is now in focus with the Federal Reserve, lately more so than inflation.
If NFP comes in lower than expected and Unemployment rate comes in higher this will support rate cuts in November and December. We would expect to see weaker dollar, US equities, and bond yields.
If NFP comes in higher than expected and Unemployment rate comes in lower this will support the path of a 25bps rate cut in November. We would expect to see stronger dollar, US equities, and bond yields.
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Trading United States Nonfarm Payrolls Commentary
We forecast payrolls at 75k, dragged down by hurricanes (-40k), strikes (-35k), and seasonal factors (-20k).
We put the underlying pace, excluding those effects, at 170k. We expect the unemployment rate stalls at 4.1%.
The workweek was pushed down and average hourly earnings up (0.4%) by the storms.
The noise in this month’s payrolls will likely decrease their significance for the November FOMC.
The unemployment rate will be a clearer signal. A storm-related rise in those employed but “not at work because of bad weather” does not boost the unemployment rate; and strikers are counted as employed.
Recent payroll reports were strong. We expect continued demand strength but less support for employment growth from labor supply.
Recent immigration data show declines in crossings, putting downward pressure on labor supply and keeping the unemployment rate low.
Hurricane Helene reached the US on September 26, before the start of the payroll survey period, and the reopening has been slow: its effect on payrolls was probably maximized.However, it mostly hit sparsely populated areas. We estimate it will subtract 35k from payrolls.
Hurricane Milton reached land late in the survey period, on October 9. Most of the affected were probably employed during the survey period, but it also hit a more populous area—we expect a 5k drag.
The true storm effects will be difficult to ascertain in the payrolls data until state data are available two weeks after the employment report. The Boeing strike affects 33k aerospace workers.
A more diffuse strike involving 5-10k in payrolls at various hotels could also have an effect. Strikers are counted as employed in the household survey; their absence from work does not boost the unemployment rate.
Seasonal factors are a downside risk. They allow for rapid NSA payroll growth in October and subtracted 591k from NSA payrolls last October. October payroll growth last year was well below the surrounding trend, at 98k vs 165k in the prior three months and 187k in the following three months. We are allowing for a 20k downward bias this October.
