US Nonfarm Payrolls: Bad NFP Numbers – 1-9-2023




INTRODUCTION:

Nonfarm Payrolls measures the change in the number of people employed during the previous month, excluding the farming industry. Job creation is the foremost indicator of consumer spending, which accounts for the majority of economic activity.


NFP keep GOLD on edge 

Focus is now squarely on nonfarm payrolls data for August, due later in the day. While the reading is expected to have weakened from the prior month, markets still remained on edge over any potential upside, given that payrolls have consistently beaten expectations so far this year.

Any signs of strength in the labor market, coupled with sticky inflation, gives the Fed more headroom and impetus to keep interest rates higher. While the central bank may not hike rates in September, it is still expected to keep interest rates at over 20-year highs for longer.

Rising rates had battered gold through the past year as the opportunity cost of investing in non-yielding assets increased. The Gold’s near-term prospects are also dimmed by rates likely remaining higher for longer. 

But gold may still see some strength this year if global economic conditions worsen amid high rates. Recent U.S. GDP data showed that the world’s largest economy was now cooling, despite defying a recession in the first half of the year.


Establishment Survey Data

Total nonfarm payroll employment rose by 187,000 in July, less than the average monthly gain of 312,000 over the prior 12 months. In July, job gains occurred in health care, social assistance, financial activities, and wholesale trade. (See table B-1.)

In July, health care added 63,000 jobs, compared with the average monthly gain of 51,000 in the prior 12 months. Over the month, job growth occurred in ambulatory health care services (+35,000), hospitals (+16,000), and nursing and residential care facilities (+12,000).

Social assistance added 24,000 jobs in July, in line with the average monthly gain of 23,000 in the prior 12 months. Individual and family services added 19,000 jobs over the month.

Employment in financial activities increased by 19,000 in July. The industry had added an average of 16,000 jobs per month in the second quarter of the year, after employment was essentially flat in the first quarter. Over the month, a job gains in real estate and rental and leasing (+12,000) was partially offset by a loss in commercial banking (-3,000). In July, employment in wholesale trade increased by 18,000, after showing little net change in recent months.

Employment in the other services industry continued to trend up in July (+20,000), compared with the average monthly gain of 15,000 over the prior 12 months. Employment in personal and laundry services continued to trend up over the month (+11,000). Employment in other services remains below its pre-pandemic February 2020 level by 53,000, or 0.9 percent.

Construction employment continued to trend up in July (+19,000), in line with the average monthly gain of 17,000 in the prior 12 months. Over the month, job growth occurred in residential specialty trade contractors (+13,000) and in nonpresidential building construction (+11,000).

In July, employment in leisure and hospitality was little changed (+17,000). The industry has shown little employment change in recent months, following average monthly gains of 67,000 in the first quarter of the year. Employment in leisure and hospitality remains below its February 2020 level by 352,000, or 2.1 percent.

Employment in professional and business services changed little in July (-8,000). Monthly job growth in the industry had averaged 38,000 in the prior 12 months. Employment in temporary help services continued to trend down over the month (-22,000) and is down by 205,000 since its peak in March 2022. Employment in professional, scientific, and technical services continued to trend up in July (+24,000).

Employment showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; manufacturing; retail trade; transportation and warehousing; information; and government.

In July, average hourly earnings for all employees on private nonfarm payrolls rose by 14 cents, or 0.4 percent, to $33.74. Over the past 12 months, average hourly earnings have increased by 4.4 percent. In July, average hourly earnings of private-sector production and nonsupervisory employees rose by 13 cents, or 0.5 percent, to $28.96. (See tables B-3 and B-8.)

The average workweek for all employees on private nonfarm payrolls edged down by 0.1 hour to 34.3 hours in July. In manufacturing, the average workweek remained unchanged at 40.1 hours, and overtime was unchanged at 3.0 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls remained at 33.8 hours. (See tables B-2 and B-7.)

The change in total nonfarm payroll employment for May was revised down by 25,000, from +306,000 to +281,000, and the change for June was revised down by 24,000, from +209,000 to +185,000. With these revisions, employment in May and June combined is 49,000 lower than previously reported.

(Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.)


Quick visit what happened till now

Total nonfarm payroll employment rose by 187,000 in July, and the unemployment rate changed little at 3.5 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, social assistance, financial activities, and wholesale trade. This news release presents statistics from two monthly surveys. The household survey measures labour force status, including unemployment, by demographic characteristics. The establishment survey measures nonfarm employment, hours, and earnings by industry. For more information about the concepts and statistical methodology used in these two surveys, see the Technical Note


Previous blog : https://blog.forextrade1.com/today-is-trapping-for-gold-traders-due-to-the-u-s-nfp-and-average-hourly-earnings-data/


Conclusion:

Today’s gold traders have chance to earn unexpected chance to earn from XAUU/USD. This unexpected turn of events serves as a reminder to gold traders of the importance of staying informed and adaptable in order to navigate the complexities of the market.