So far the monthly reports on employment in the US Nonfarm Payrolls (NFP) are becoming more and more interesting. Last month, the figures exceeded even the wildest analytical predictions, showing a great numbers of one of the most important indicator of the US economy: 190K. So, what to wait this Friday?
Our Forecast
On the one hand, given the soft statements of various prominent figures of the American economy, it can be concluded that the figures are likely to be in the region of 185-190K. On the other hand, given the deafening vibrations of most world economic areas during this month, especially in developing countries, it is possible to expect that the number of new jobs in the US will exceed 200-210K.
In favor of the second option say several factors. The first one is the continued strengthening of the US currency against its major rivals, even taking into account the recent slight weakening against the single European currency.
The second factor is the continuing negative trend in oil prices and the weak prospects of its change. And all of it on the background of the fact that the US in the past month began shipping its oil to Europe, as a result of lifting the embargo on exports. New export field automatically means more new jobs.
And the third facto: it is an excellent growth performance of individual sectors of the US economy, especially the automotive industry, which is considered by many as an example of a successful exit from the world economic crisis.
All this allows us to take a risk and assume that, most likely, this time, the Nonfarm Payrolls figure will once again surprise the skeptics and show data at 210K and more.
What Do Others Think?
Analysts at Lloyds Bank decided to stick with much more modest figures, although this tactic with respect to NFP clearly does not justify itself in the past few months.
They predict a modest 185K, basing their conclusions that the fundamental data of the last week, together with restrained comments of the FOMC about the prospects for further growth in the US economy, say against a repetition record of last month’s NFP figures.
In our opinion, both forecasts are unlikely to weaken the current, relatively strong position of the US dollar, but their contents and different interpretations are likely to bring increased volatility in the forex market this Friday.
