Predictions For Nfp - page 3

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Hmmm Wierd

Bad USD news and it is rising.

 
 
 
 

NFP Preview, ECB Review

Will US Payrolls Drive Dollar to Fresh Highs?

Non-farm payrolls are scheduled for release on Friday but after Thursday's big move in currencies, NFPs could be nothing more than an after thought for most investors. The dollar climbed to fresh multi-month highs versus the Euro, British pound, Japanese Yen and Swiss Franc. Better-than-expected U.S. data contributed to the moves, but it was the European Central Bank's aggressive decision to cut interest rates and pre-announce ABS purchases that sent European currencies sharply lower. With this in mind, the ECB's actions shine the light on the superiority of the U.S. economy and monetary policy. The Federal Reserve made it very clear that they are gearing up to end their Quantitative Easing program next month and their next step, whenever they decide to take it, will be to raise interest rates. The narrower trade balance and acceleration in service sector activity will make the central bank even more confident about their plans to roll back stimulus. So while Friday's non-farm payrolls report is important, in all likelihood, monthly job growth was somewhere between 175k to 250k and most likely above 200k - a level that will keep the Fed's monetary policy plans on track. In other words, there is more upside than downside risk for the dollar Friday because as long as job growth exceeds 150k, which is significantly lower than the 230k consensus forecast, the outlook for U.S. policy will remain unchanged. In fact, Cleveland Fed President Mester, who is a voting member of the FOMC this year sounded relatively optimistic Thursday, which means the Fed added another hawk to their roster. We are looking for healthy job growth with payrolls between 230k to 250k and if we are right this would reinforce the U.S. recovery story and drive the dollar to fresh highs versus the EUR, GBP and JPY.

Every month, we take a look at the various labor-market indicators to gage the potential strength or weakness of the upcoming non-farm payrolls report and for the most part, they all point to a good number. Service sector employment increased, layoff announcements declined and confidence hit a 6-year high as measured by the Conference Board. While the 4-week moving average of jobless claims ticked up slightly, the overall level is still extremely low and consistent with payrolls in excess of 200k. The drop in employment component of the manufacturing ISM report was small and according to ADP, companies still added more than 200k workers to their payrolls last month. As usual, aside from the absolute amount of job growth, traders also need to keep an eye on the unemployment rate and average hourly earnings but at the end of the day, we don't expect Friday's report to pose much threat to strong the uptrend in the dollar.

Arguments For Stronger Payrolls

  1. ISM Non-Manufacturing Employment Component Rises to 57.1 from 56
  2. Continuing Claims Fall to 2.46 million from 2.55 million
  3. Challenger Grey & Christmas reports 20.7% drop in layoff announcements
  4. University of Michigan Consumer Confidence Index Rises to 82.5 from 81.8
  5. Consumer Confidence Hits 6 year High, Index rises to 92.4 from 90.30

    6. Arguments For Weaker Payrolls

  6. ADP reports 204k rise in payrolls, down from 212k
  7. ISM Manufacturing Employment Component Drops to 58.1 from 58.2
  8. Jobless Claims 4 Week Moving Average Rises to 302k from 293k

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I think there could be a surprise better than expected reading, somewhere above 230 K.

 

They started using part time jobs too in those numbers in order to make those numbers look better. It will come in better again

 

Solid U.S. employment growth eyed in August

U.S. job growth likely accelerated a bit in August and the unemployment rate probably fell to 6.1 percent, offering fresh evidence of sustained momentum in the economy.

Economists predict that nonfarm payrolls increased 225,000 last month, according to a Reuters survey. It would mark the seventh straight month that employment has expanded above 200,000 jobs - a stretch last witnessed in 1997.

The government reported last month that the economy added 209,000 jobs in July. Economists, however, expect June and July data will be revised to show more jobs created than previously reported, in line with a recent trend of upward revisions.

"It would be further confirmation that the economy is strengthening and is poised to break out later this year or early next," said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania.

The Labor Department will release its monthly employment report at 8:30 a.m. on Friday. The report regularly sets the tone for financial markets worldwide.

Should employment meet expectations, it will add to data such as automobile sales and manufacturing and services sector gauges in casting the economy in a bullish light.

Third-quarter growth estimates range as high as a 3.5 percent annual rate, well above the economy's long-term growth potential, which economists peg as between 2.0 percent and 2.5 percent.

But solid jobs growth alone is insufficient for the Federal Reserve to initiate an early interest rate increase.

Fed Chairman Janet Yellen is concerned about sluggish wage growth, the still-elevated numbers of Americans working part-time even though they want full-time employment, and Americans still suffering from a long spell of joblessness.

While many of these metrics are improving, the U.S. central bank has pointed to these factors as evidence of a "significant underutilization" of labor market resources that merits a stimulative monetary policy.

"The Fed will be encouraged by the ongoing labor market improvement, but they are still wanting to see more marked progress in these measures to see that the labor market slack is being reduced," said Sam Bullard, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.

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