Awaiting the US Employment Report… And the Canadian One
Skerdian Meta • 1 min read
The US and Canadian employment reports are about to be released soon. The market has been waiting for the US report in particular today, so forex has been relatively quiet without any direction.
There are three main sectors in this report, “Average hourly earnings”, “Non-farm employment change” and the “Unemployment rate”. There is a contradiction at first glance, the employment change number is about to fall which means that less people are finding work compared to last month.
Non-Farm Employment Change and Unemployment Rate
Yet, unemployment is expected to fall as well. The current unemployment rate comes at 4.1% and it is expected to fall to 4.0%. But how come, less people start work and the unemployment rate still falls.
Well, that’s because when you calculate the unemployment rate you only take into account the number of people that are actively seeking work. If you unregister at the local employment office and stop receiving benefits as unemployed, then you are not considered unemployed anymore.
Although, the most important aspect of the report is the unemployment the average hourly earnings data or as it is often called “Wages”. Wages are expected to pick up this month. Last month, the number came at 0.1% which declined from the previous month.
This month, wages are expected to grow by 0.3%. That would be a positive number which will likely help the cause of the USD buyers. If it comes higher, then I expect the US Dollar to resume the uptrend and climb at least 100 pips. But, it’s a big report with lots of subsections, so we will read the entire report (main points) before making a move.