World Awaits US Jobs Report

Kate Leaman
Kate Leaman

5 December 2019

3 min read

  • Non-Farm Payroll figures on Friday
  • 186,000 additional jobs expected for November
  • Unemployment Rate expected to be 3.6%
  • Average Hourly Earnings M/M expected to be 0.3%

During the Thursday session, it will more than likely be somewhat quiet as the world awaits the US jobs report on Friday. Without a doubt the biggest announcement for the markets, the Non-Farm Payroll figures will cause a lot of volatility and perhaps give traders and investors an idea as to how the global economy is faring overall. Remember, the United States is the world’s largest economy and the consumer makes up 70% of that economy.

Non-Farm Payroll

The Non-Farm Payroll announcement of the US jobs report comes out at 8:30 AM New York time on Friday, giving investors and traders an idea as to how the US economy is performing. Obviously, the more people that are employed, the better off consumption will be, driving up inflation. This, in turn, has a bit of a knock-on effect on the US dollar as it shows whether or not the Federal Reserve is likely to do anything on the monetary policy front, and it also will give stock markets a bit of a “heads up” as to whether or not spending will increase.

it shows whether or not the Federal Reserve is likely to do anything on the monetary policy front, and it also will give stock markets a bit of a “heads up” as to whether or not spending will increase

This is especially interesting this time of year as retail sales come into focus for the Christmas season. Obviously, the more people employed, the more likely they are to spend for the holiday, giving a boost to companies such as Amazon, Macy’s, Kohl’s, Best Buy, and the like. Beyond that, it also has a ripple effect on other things like housing and automobile sales.

The expected figures

The headline figure of the US Jobs report is expected to show an addition of 186,000 jobs for the previous month, showing a lot of signs of continued expansion. If the number is higher than that, it’s likely that stock markets will react positively. However, if the number is much lower than that there will probably be an initial knee-jerk reaction to the downside, which will have traders starting to bet on the Federal Reserve loosening monetary policy. This has been the pattern for 10 years.

The Unemployment Rate is expected to come in at 3.6%, but sometimes this number can be a bit misleading because of the way it’s figured. For example, if enough people fall off the “looking for work” role, which is someone who has been unemployed for less than 18 months, then it will drive down the percentage. However, that’s not a good thing. On the other hand, it can also rise if more people are actively looking for work and trying to come back into the workforce which makes the number look worse than it really is.

Average Hourly Earnings will be released as well, and it is a look at how much the average worker charges its employer for labor. If this rises slightly, that’s a good thing for inflation, which is typically a good thing for the currency. That being said, this is normally a number that’s parsed a little later in the day for longer-term investors.

Between now and then, markets will probably be relatively quiet, as this causes so much in the way of volatility and potential swings of profit and loss in a trading account.

Kate Leaman
Written By
Kate Leaman

With over 10 years experience as a trade news writer, Kate is our FX and commodities expert. Kate is also a talented voice over artist and BBC TV presenter, mother of two and yoga fan. Read Kate's bio

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