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January Non-Farm Payrolls Preview
By DailyFX Updates | January 31, 2008
It’s time for non-farm payrolls. The Federal Reserve lowered interest rates by 50bp on Wednesday and indicated that they will be cutting rates further in the months to come. How much and how quickly they reduce interest rates again will be dependent upon the level of job growth in the month of January. With the currency market in limbo after the FOMC announcement, non-farm payrolls should clarify the near term outlook for the US dollar.
In order to determine the strength of non-farm payrolls, we typically look at 10 pieces of data that we call the leading indicators for non-farm payrolls. Unfortunately, this time around, non-farm payrolls are being released on the first of the month, which means that 3 of the most important indicators that we follow (Challenger Layoffs, Manufacturing and Service Sector ISM) will not be released until after the NFP report. Although this makes it difficult to pinpoint the exact range for non-farm payrolls growth, the data that has been released suggests that there will be strong rebound from last month’s exceptionally weak number. Since December, average jobless claims have ticked lower, help wanted ads have increased and according
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