What to expect from NFP release?

The release on the US labor market, scheduled for this Friday, will cause traders an unprecedented interest. The main reason is the shocking past employment data in the country's non-agricultural sector.

NonFarm Payrolls

Last data: 20K

Consensus forecast: 175K

NFP data of the last month truly shocked even the most pessimistic analysts. Absolutely no one expected to see numbers in 20,000 new jobs. American analysts called the release the worst since September 2017, when two powerful hurricanes caused enormous damage to the American labor market.

However, another part of the experts believes that the indicator has declined so much due to the oddities that the US Department of Labor uses to calculate the indicator - real employment outside the agricultural sector has increased by 198,000 people. But according to the ministry’s calculation formula, they were not officially included in the list of the labor force in the previous release.

Comparing the data and taking into account the fundamental data of the United States, we predict new NFP figures in the region of a modest 175,000, expecting, nevertheless, that they can reach 185-190,000.

If this forecast is justified, then traders should expect a rally in all pairs with the US dollar.

Average Hourly Earnings

Last data: 0.4%

Consensus forecast: 0.2%

Undoubtedly, the previous release of NFP has also influenced Average Hourly Earnings. In this case, the consensus forecast of analysts gives 0.2%. This is also facilitated by aggregate data on the current dynamics of the US industrial sector.

If the forecast is justified, it is unlikely to have a serious impact on the rate of the American currency. The growth of the dollar will be observed if this forecast coincides with strong numbers on the NFP and the unemployment rate.

Unemployment Rate

Last data: 3.8%

Consensus forecast: 3.8%

The unemployment rate, according to most experts, will remain at the same level of 3.8%. According to the fundamental data, this indicator may be affected by the continuing effects of the temporary cessation of work by the US government, but its influence on this data is unlikely.

If this forecast is justified, it will positively affect the rate of the American currency, although it is not worth expecting a US dollar rally.