NFP Job Preview

This Friday traders look to possibly the most critical Non-farm payrolls job report of the year so far as the Fed remain data dependent as the US economy starts to slow.

The Fed has delivered four interest rate hikes this year totalling 2.25 percentage points in an effort to control inflation that has run at its fastest rate since in 30 years.

Last month the Nonfarm payrolls rose by 372,000 and the unemployment rate held steady at 3.6%. July’s numbers will be out Friday, with economists looking for a much lower headline number than last month.

Most market experts are looking for an increase of 258,000. Such a headline number would probably help to react the recent buy stocks sell the US dollar trade.

Still, some bearish signs are emerging that Friday jobs number could be even weaker. The JOLTS report showed that in job opening June to their lowest level since September 2021 in a potential sign that a historically tight labour market is starting to slow.

The total of employment vacancies fell to about 10.7 million through the last day of June, a decline of 605,000 or 5.4. Worryingly, experts had been looking for 11.14 million.

Hiring also slowed during the month of June, while the level of people who quit the workforce was little changed but well-off record levels seen earlier this year.

It should be noted that Federal Reserve officials watch the JOLTS numbers closely as they look at the labour market in-depth and how that might influence interest rates.

Based on what we are seeing inside weekly jobless data I think there is scope for a disappointment this Friday in terms of the headline number and unemployment rate.

Also, initial jobless claims in the United States fell by 5,000 to 256,000 in the week ended July 23, according to data from the Labour Department last week.

Economists polled by The Wall Street Journal had estimated new claims would inch down to 249,000 from last week’s initial estimate of 251,000. The department revised last week’s level to 261,000, marking the highest level since mid-November.