Non Farm Payroll - Consensus Estimate 80,000 jobs

What a difference a month makes! The Department of Labor’s most recent report stated that non-farm payroll (NFP) employment rose by 110,000 during the month of September, leaving analysts stunned and the majority in agreement on the consensus of 80,000 new jobs in October. The surprise announcement and revision, which raised total payroll employment to 138.3 million, followed increases of 93,000 in July and 89,000 in August . With initial claims of a recent uptrend, however, look for job growth to slow in October.

Several key factors are thought to have influenced the recent NFP report. They include:

· Employment in manufacturing and construction decreased by 18,000 in September, bringing total amount of jobs lost to 223,000 year to date

· Private service-providing jobs expected to rise to nearly 100,000

· Unemployment expected to hold steady at 4.7%

For week ending October 27^th, the Department of Labor reported that the advance figure for seasonally adjusted initial claims was 327,000, a decrease of 6,000 from the previous week's revised figure of 333,000. They also reported a four week moving average of 327,000, an increase of 1,750 from the previous week's revised average of 325,250.

When the Fed next meets on December 11^th for the Federal Open Market Committee (FOMC), October and November's jobs reports will most certainly play a key role in whether interest rates are cut in December.

What is the non-farm payroll report?

Of all the world monthly economic reports, the monthly US NFP report is the most highly anticipated and has the most dramatic impact on the currency market.

The report, which is released on the first Friday of each month and states the previous month’s numbers, provides detailed industry data on employment, hours and earnings of workers on nonfarm payrolls. These numbers are the best way to gauge the current state of the US market as well as the direction that the economy is heading.

What’s more, the employment numbers provided by the report are used by the Fed to shape their interest rate policies. The health of the US economy and interest rates translate to the strength or weakness of the US dollar.