Non-Farm Employment Change- Unemployment Rate

Private sector employment report

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 closely related to human resource conditions and a large portion of gross domestic production
The US economy created 187,000 jobs in July of 2023, below market expectations of 200,000 and after the downward revision of 185,000 in June. The reading is also lower than the average monthly gains of 312,000 over the previous 12 months but still about double the 70,000-100,000 needed per month to keep pace with growth in the working-age population. Job gains occurred in healthcare (63K), specifically ambulatory healthcare services (35K) and hospitals (16K); Social assistance (24 thousand); Financial activities (19 thousand), namely real estate and rentals (12 thousand); And wholesale trade (18 thousand). Employment in the leisure and hospitality sector rose by 17K, but job gains in that sector showed little change in employment in recent months, after an average monthly gain of 67K in the first quarter. However, employment in the leisure and hospitality sector remains 352,000 below its February 2020 level. May's payroll numbers were also revised downward. With these revisions, hiring in May and June combined is 49,000 lower than previously reported

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

The estimate for today's data is 169,000 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 slightly to 3.5% in July 2023 from 3.6% in June and below market expectations of 3.6%. The number of unemployed decreased by 116 thousand to 5.841 million and employment levels increased by 268 thousand to 161.262 million. The so-called under-6 unemployment rate, which also includes people who wanted to work but gave up searching and those who work part-time because they can't find full-time work, fell to 6.7% in July from 6.9% in June. . The labor force participation rate remained unchanged at 62.6%, remaining at its highest level since March 2020.

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

Markets expect the unemployment rate to reach 3.5% today
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

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 Consumer Confidence Index recorded a negative reading of 106.1, below expectations of 116.

 The Employment Opportunities (JOLTS) came in negative at 8.83M, below expectations of 9.49M.

The Non-Farm Payrolls report issued by (ADP) recorded a negative reading with a result of 177K, lower than the expectations that indicated 194K.

The preliminary reading of the gross domestic product (quarterly) for the United States recorded a negative reading at a rate of 2.1%, below expectations, which indicated 2.4%.

Unemployment Claims came in at a positive reading of 228K, below expectations of 236K

Outlook for employment data today

Expectations indicate the recording of 167 thousand jobs in the non-agricultural sector, which is considered the lowest since the year 2022, as the rate of change in employment in the non-agricultural sector maintained the level of 180 and above, and what we witnessed at the Jackson Hole summit by the Chairman of the Federal Reserve about the possibility of raising interest rates and more. From the monetary tightening of 2023, it gave some positivity to the US dollar until the release of this week’s economic data, which reflected the markets’ view of the possibility of stabilizing interest rates. Today's statement is negative for the labor market unless we witness a rise above the level of 180 thousand, and if we look at the report on the rate of change in employment issued by ADP, it proves the negativity of the labor market