US November non-farms payrolls preview

Job growth is expected to slow in the latest payrolls report. Is this a sign of tougher times to come?

Job growth to slow

From last month’s 661,00 jobs, this month’s payrolls release is expected to show an increase of 600,000, a modest slowdown, but the lowest reading since the rebound in job creation began earlier in the year. The unemployment rate is expected to improve however, falling to 7.6% from 7.9%. This continues the positive direction of travel from the 15% peak.

But can the US keep adding jobs as the Covid-19 crisis intensifies? Far from turning a corner, the virus situation in the country continues to worsen, with cases still climbing. Crucially, the near-term outlook for the economy has darkened, given the lack of a new fiscal stimulus programme.

ADP numbers this week showed a sharp drop from the expected level and from last month, at 365,000 for the month from 753,000 last month, and a 650,000 forecast. Investors will be hoping non-farm payrolls can avoid following this figure.

Dollar outlook

The week has seen the dollar give up all its late October gains, as the basket heads back to 92.50. This points towards further upside for EUR/USD and GBP/USD, as investors expect the Federal Reserve to move to a more accommodative footing, both to help a slowing economy and to compensate for the reduced chances of a stimulus programme arriving soon thanks to the election result.


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Non-farm payrolls report

Discover how the non-farm payrolls report affects the American markets ahead of the next announcement on 7 June 2019.

  • Which markets could become more volatile after the NFP report?

  • Why was the report introduced and what does it really tell us?

  • Why is the report important for traders?

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