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
US nonfarm payrolls likely rose by 170,000 last month, down from 187,000 in August, marking the fourth straight month with job gains falling below the 200,000 mark. However, job gains will still be well above the 70,000 to 100,000 needed per month to keep pace with growth in the working-age population, suggesting that the labor market is gradually softening but remains resilient despite the Fed's tightening campaign. The United Auto Workers strike is not expected to impact the data yet. Meanwhile, resolving the Hollywood writers' strike could provide a slight boost to payrolls. The unemployment rate is expected to fall to 3.7% from 3.8%, the highest since February 2022. Wages are likely to rise by 0.3%, compared to 0.2% in August, which will keep the annual growth rate steady at 4.3%. . Labor force participation will also be in the spotlight after it rose to 62.8%, the highest level since February 2020.

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

The estimate for today's data is 171,000 jobs
If the data is released higher than expectations, the impact 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 working and actively seeking a job during the past quarter
The US unemployment rate rose to 3.8 percent in August 2023 from 3.5 percent in July, the highest level since February 2022 and above market expectations of 3.5 percent. The number of unemployed rose by 514,000 to 6.355 million and employment levels rose by 222,000 to 161,484 million. The so-called under-6 unemployment rate, which also includes people who want to work but have given up looking and those who work part-time because they cannot find full-time work, rose to 7.1 percent in August, the highest level since then. . May 2022, from 6.7 percent in July. The labor force participation rate increased to 62.8%, the highest since February 2020, from 62.6%.

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

Markets expect the unemployment rate to reach 3.7% today
If the unemployment rate is higher than expected, we will have a negative impact on the currency, as it indicates an increase in unemployment and vice versa

Timing of united states employment data release

Employment data will be released at 3:30 pm Mecca time

A reminder about the data released 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 personal consumption expenditures price index recorded a negative reading of 0.1%, lower than expectations of 0.2% (negative result).

The Manufacturing PMI for the selected states recorded a positive reading at 49, higher than expectations of 47.8 (positive result)

The US job openings report recorded a significant increase with a result of 9.61M, higher than expectations, which had indicated 8.81M (positive result)

The change in non-agricultural private sector jobs issued by (ADP) recorded a negative reading of 89K, lower than expectations of 154K (negative result).

The services PMI for the United States recorded a positive reading at 53.6, higher than expectations for 53.6 (positive result)

What can we expect for US employment data today

During this week, two economic data were issued regarding the US labor market and market reaction, clarifying what we can expect from today's data
First, the job opportunities statement was issued, recording a positive reading, adding 9.61 million, which affected the dollar in a very positive way. The effect was the markets’ reading of this statement, which indicated the strength of the labor market, which allowed the markets to price another interest rate hike by the Federal Reserve.
Secondly, the private sector employment report issued by (ADP) was issued, recording a very negative reading of 89 thousand, which is considered the lowest for this year, which indicates concern for today’s data, and expectations of negative data.
Traders should pay attention to what comes after today’s employment data. If we witness positive employment data, we will see strength in the dollar longer than the effect of the usual statement. This is the result of the markets’ tendency once again to price more interest increases as a result of the stability and strength of the labor market. However, if we witness a negative reading, the US dollar will decline. It is the only way in the medium term at least