US Nonfarm Payrolls Forecast: Analyzing January NFP release – by FXstreetNews NFP UnitedStates EURUSD EconomicIndicator SEO
The US Dollar’s fate hinges on the Average Hourly Earnings, which unexpectedly declined to 4.6% in December.
The Nonfarm Payrolls data will be released by the Bureau of Labor Statistics this Friday at 13.30 GMT. The lastis set to show that the United States economy created 185K jobs in January. However, a downside surprise cannot be ruled out after the US ADP private sector payrolls dropped sharply to 106K in January, missing expectations of 178K and against the previous reading of 253K. Weak US employment data could exacerbate the pain in the US Dollar .
Powell referred repeatedly during a news conference to the "disinflationary" process that now appeared to be underway, which markets view as the Fed could be turning a corner on its tightening cycle. While that justifies a weaker USD, the move may have gone too far. This should imply the beckoning of an upside correction in the US Dollar should the Nonfarm Payrolls headline number deliver a positive surprise.
Analysts at Commerzbank agree with the consensus of a slowing-down US job market: “In December, more than 200K new jobs were created again in the US. However, there were some details in the employment report that point to a gradual weakening of the labor market. For example, the number of temporary workers shrank for the fifth month in a row, a trend previously seen only in the run-up to recessions. In addition, despite continued substantial job creation, the number of hours worked fell.
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