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How would the markets waltz around the nonfarm payrolls? New year, same old?

Jan 2 2020, 09:17 AM (+06) | ATFX

With a “soap opera” kind of drama for the American markets, which started with the US-China talks and ended with Trump’s impeachment – everybody’s waiting for another Star to show up with a plot twist; the nonfarm payrolls. The expectations and the actual numbers will give the markets a wider view on how healthy was the American economy over the year of 2019.

Last month’s payroll passed all expectations, a rise of 180,000 jobs were predicted yet the actual numbers rose to 266,000. A figure that indicates that the US labour market is in a solid condition. It is the best since 1969, with an unemployment rate as low as 3.5%. Something might be working just fine in Trump’s administration.

Yet again, are these figures enough for us to turn on the music and start partying our way to 2020?

Even if the numbers exceed the expectations one more time, the full picture can’t be finalised by nonfarm payrolls figures on its own. To have a genuine idea on the rise or fall of Americans spending power, we will need to link the numbers to another indicator in the same report which is the average wage per hour, as well as connecting those data to the inflation rate report.

And that’s only the beginning! But let’s dig deeper into that first.

For over a year now, the Fed’s inflation target still far away from the current percentage is 1.0% vs a target of 2.0%. An issue hard to control, especially post the 2009 recession; when the Federal reverse went for quantitative easing through bond-buying programs which created an “artificial” boost for markets, and for now, we’re unable to detach its effect to analyse genuine data.

As for the average hourly wages, a great sign was seen last November with an all-time high of 23.83 USD per hour. But, if we take a closer look, these reports are not all cheerful. For example, the unemployment rate hasn’t decreased fairly for all Americans. On the contrary, for some groups, it has been increased. The unemployment rate for African Americans and Hispanics has risen to 4.2% and 5.5% respectively.

 

Most likely, the readings for December 2019 will range around an average of 168 thousand jobs, as for the average wage growth rate it will likely remain steady around the level of 3.1% annually. Achieving these numbers is necessary to trust that the performance, of a strong and steady, the American labour market is maintained throughout the year. A much-needed sign for the Feds to keep their monetary policy fixed and stable.

 

Information provided by ATFX (AE) Head of Market Research: Ramy Abouzaid
 
Legal: AT Global Markets (UK) Limited is authorised and regulated by the Financial Conduct Authority (FCA) in the United Kingdom. FCA registration number (760555). Registered Office: 32 Cornhill, London, EC3V 3SG. Company No. 09827091

ATFX

About ATFX A global award-winning forex broker, ATFX was established with the aim of providing a robust online trading platform for retail traders interested in trading, forex, cryptocurrency, precious metals and energy CFDs and. Today, the company, headed by an elite management team, has a global presence and offers a wide range of trading products. To ensure a seamless trading experience, the company offers MetaTrader 4, the most popular trading platform in the world, while connecting MT4 with the top liquidity providers with the latest bridging technologies. Due to its client-focus, ATFX also offers free access to market research, courses for all levels of trading, from novices to advanced levels, 24/5 live help and customer support, and highest level of protection for traders. Awards The outstanding performance of ATFX in our services have gained recognition from the market. During the year under review, the brand achieved over 20 international awards in 2018, included FX Broker of the Year, UK, Fastest Growing Forex Broker, Europe and Best Trader Education Service Provider. It regarding service, trading instruments, and the development in recognition of its commitments to excellent service to traders in corporate governance. Staffs are ATFX’s most valuable asset With close to 400 employees in offices around the globe, it aims to establish a strong footprint. ATFX now has websites in multiple languages tailored to each of the regions it serves and aims to provide the best-in-class products and services. From its user-friendly online trading platform to its multi-lingual customer support, offered by skilled and experienced professionals, ATFX takes pride in providing a safe and easy trading environment along with prompt help in the language that local traders (e.g. Europe, China, Southeast Asia …) are most comfortable in. Investors Education Following nearly 500 seminars that were successfully held during the last 12 months. ATFX has continued its principled commitment of educating its investors by conducting a series of seminars across the world, which are free and educate its participants about various trading techniques and helps learn the basics of risk management. It looks to provide a holistic service which includes the trading platform, along with a team of skilled and experienced professionals, allowing clients to gain access to comprehensive trading services. Website:www. atfx.com Hotline: 0080 112 7901 [email protected] [email protected] Legal: ATFX is a trading name of AT Global Markets Limited (ATGM, registration number 24226 IBC 2017). ATGM is an International Business Company in Saint Vincent and the Grenadines. Registered address is : the Financial Services Centre, Stoney Ground, Kingstown, St.Vincent& the Grenadines.
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