The US labour market has been increasingly showing signs of weakness in recent months, after being quite strong throughout the last two years, despite the FED raising interest rates at an enormous pace. In fact, this sector has been helping consumption in the US, keeping the economy afloat. But, the recent numbers have been soft, so today’s NFP numbers take extra importance.

Earlier this week the JOLTS job openings for October fell to the lowest level in almost two years. The Labor Department said that job postings declined significantly in October, reaching their lowest level since March 2021. According to the Job Openings and Labor Turnover Survey, there were 8.7 million job vacancies, down from 9.3 million in the previous month, which was much lower than the 9.3 million job openings expected by economists.

The ADP number on Wednesday also came below expectations, sticking close to 100K, although yesterday’s unemployment claims numbers remained stable. ADP Employment Change for November came at 103k, falling short of 130k expected, and Q3 Unit Labor Costs came at -1.2%, which is considerably lower than the 0.9% predicted by analysts. So, everyone is watching today’s Non-Farm Payrolls report.

Expectations for the Non-Farm Payrolls Employment Report

• NFP estimate +180K (range +100 to +275K)
• Private payrolls +158K
• October payrolls were +150K
• Unemployment rate consensus estimate: 3.9% vs 3.9% prior
• Participation rate consensus 62.7% prior
• Prior underemployment U6 prior 7.2%
• Avg hourly earnings YoY expectations +4.0% vs +4.1% prior
• Avg hourly earnings MoM expectations +0.3% vs +0.2% prior
• Avg weekly hours exp 34.3 vs 34.3 prior

According to the Bureau of Labor Statistics, employers hired a net 150,000 people in October, however, the unemployment rate ticked higher to 3.9%. In November we’ll a return of striking autoworkers and actors returning to work, which will likely increase the NFP number, which is expected at around 180K, as shown above. This would be slightly positive for the USD, so we will try to go long on the buck in case the number jumps, particularly against Gold, the Euro and the GBP, since these three assets have been showing increasing weakness recently.

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