Evdokia

Evdokia Pitsillidou, Head of Risk Management at easyMarkets.

She specialises in commodities, options and currencies and loves to solve analytical problems and overcome challenges.

The U.S. economy is adding jobs at a solid pace, with the labour market continuing to meet the Federal Reserve’s definition of full employment.

That picture is unlikely to change on Friday when the Department of Labor releases its highly-anticipated nonfarm payrolls report. If the recent ADP numbers are any indication, August will be another solid month for employers.

What Economists are Saying About the NFP 

The US economy likely added 180,000 nonfarm jobs this month, according to a median estimate of economists polled by Bloomberg. The consensus range is between 147,000 and 205,000. The same forecast shows private payrolls rising 179,000 and unemployment holding steady at 4.3%.

Average hourly earnings, an important measure of labour cost inflation, are expected to rise 0.2% on month and 2.6% annually.[1]

What ADP Says About the NFP 

On Wednesday, the ADP Research Institute blew away expectations when it said private sector employers added 237,000 jobs in August. That followed an upwardly revised gain of 201,000 in June and was the fastest pace of expansion since March.

The US private sector has added more than 200,000 jobs in six of eight months, based on ADP data.

“The job market continues to power forward,” Mark Zandi, chief economist of Moody’s Analytics, said in a statement. Job creation is strong across nearly all industries, company sizes. Mounting labor shortages are set to get much worse.[2]

NFP Impact on Markets

The NFP report is arguably the most closely-watched data set of the month. As such, it will likely have a major impact on the markets if the official numbers deviate from the consensus view. Given the recent ADP report, that’s entirely possible.

The US dollar spiked on Wednesday as the combination of ADP and GDP numbers lifted investor sentiment. That’s because economic data feed into expectations about Federal Reserve policy.

The Federal Open Market Committee (FOMC) will hold its next policy meeting on September 19-20. The meeting will be accompanied by quarterly economic projections.

Nonfarm Payrolls Release Schedule

The NFP report will be released Friday at 8:30 a.m. ET. The report will capture the following:

  • Nonfarm employment growth
  • Unemployment rate
  • Participation rate
  • Average hourly earnings
  • Average weekly hours

[1] Bloomberg. 2017 Economic Calendar: Employment Situation (August).

[2] ADP (30 August 2017). ADP National Employment Report: Private Sector Employment Increased by 237,000 Jobs in August.

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