Non-Farm Employment Change- Unemployment rate

Non-Farm Employment Change and Unemployment Rate 

Non-Farm Employment Change

Determines the level of change in the level of people employed over the past month excluding the agriculture sector
Job creation is an important indicator of economic recovery, which is largely related to human resource conditions and a large part of GDP
The US economy likely added 185,000 jobs in January of 2023, marking the sixth consecutive month of slowing job growth and the weakest reading since December of 2020. Leisure and hospitality probably added the most jobs while the return of the 36,000 college workers struck at California also made a positive contribution. The unemployment rate is expected to rise to 3.6% from a 50-year low of 3.5%. Wages are expected to rise 0.3%, as they were in December, but the annual wage growth rate is likely to drop to 4.3%, the lowest level since August 2021, from 4.6% in December. The January report is expected to continue to show a tight labor market, although hiring slowed as the situation normalized after the shock of the pandemic and with some companies bracing for an economic slowdown and continued technical layoffs.

Outlook for today's statement and how it will affect the currency

The estimate for today's data is 193 thousand jobs
If the data is released above expectations, the effect will be positive on the currency and vice versa

Unemployment rate

The unemployment rate determines the proportion of the total labor force that is not employed and actively seeking a job during the past quarter
The US unemployment rate fell to 3.5 percent in December 2022, below market expectations of 3.7 percent and matching rates seen in September and July, which were the lowest since February 2020. The latest jobs report came on the heels of a sharp drop in weekly jobless claims to a three-month low and a smaller-than-expected drop in the level of job vacancies in November, indicating a still tight and solid labor market, which may mean that the US central bank will continue to raise interest rates for a short period. The number of unemployed decreased by 278 thousand to 5.72 million in December, while the number of employed increased by 717 thousand to 159.2 million.

Outlook for today's statement and how it will affect the currency

Markets expect the unemployment rate today to be 3.6%

In the event that the unemployment rate records a reading higher than expected, we will have a negative impact on the currency, as it indicates a rise in unemployment, and vice versa

Timing

This data is issued every Friday of the first month at 4:30 pm Mecca Al-Mukarramah time

A reminder about the data issued during this week related to employment, unemployment and the economy in general, which gives us an idea of the outcome of today's report

The core PCE price index came in as expected at a rate of 0.3%.

The Consumer Confidence Index recorded a negative reading at 107.1, below the expected level of 109.1 (negative reading)

The manufacturing PMI for the selected states came in negative at 47.4 below the expected level of 48 (negative reading)

The US Employment Opportunity report printed positive at 11.01M, higher than the forecast of 10.28M (positive reading)

The ADP Nonfarm Payrolls Change came in negative with a reading of 106K, below expectations of 176K (negative result)

Unemployment complaints recorded a positive reading of 183k, lower than the expectations that were indicating a rise of 196k (positive reading)

Our expectations for employment data today

Based on the economic data issued during the past weeks (mentioned above), most of which recorded negative readings, most notably the decision to change jobs in the non-agricultural private sector issued by (ADP), which in turn recorded a noticeable decline with a result of 106k less than the last issue, which was recorded at 253k, and also lower than Expectations, which were referring to 176K, and these results indicate a decline in employment data, and on the other hand, raising interest rates by 25 basis points could improve the labor market

Traders should pay attention to the following points

The rate of change in employment in recent times records positive readings that are higher than expectations, but it is in a continuous decline from one month to the next, and the results show this, as it declined from July 2022 from 537k levels and continued to decline to the last issue, where it recorded a level of 223k, for these reasons in the event Employment data only recorded a positive reading, higher than expected, and not an improvement from last month, as the impact will be negative on the US dollar