US jobs preview: will US non-farm payrolls surprise us?

The most-watched event for economists and investors at the end of this week can undeniably be the US non-farm payrolls report, due to be released at 8:30 am US time on Friday.

The US non-farm payrolls (NFPS), an official economic calendar released monthly by the US Department of Labor, measures the number of people in employment in all businesses across the country, excluding farm workers, private household employees, or non-profit organizations.

What makes this report so appealing is that it gives a keen insight into the health of the U.S. economy. Specifically, declining non-farm payroll figures indicate the risk of a possible recession, while robust data on a month-on-month basis show a strengthening economy.

At the same time, it offers clues about which sector is expanding or contracting for those seeking a job. A pick-up in jobs in medical field, for instance, might indicate there is a pending need for the nurse practitioner, physician assistant and surgeon.

Moreover, it provides a strong impetus for determining whether the Fed will continue to raise interests rates at its late September meeting to tamp down the soaring inflation.

As the NFP figures get high, it suggests that the US economy is strengthening and that the value of the USD currency would grow with it correspondingly. Given this increased strength against other currencies, market participants will be more optimistic about investing in the US-dollar-denominated assets.

On the flip side, when the NFP figures are negative, it indicates that the U.S. economy is depreciating accompanied by the dipping US dollar. Therefore, market traders will feel reluctant to invest in the US-dollar-denominated assets.

Furthermore, the NFP also takes knock-on effects on the company stocks. When the NFP shows robust employment figure, it hints that some enterprises are faring well and investing opportunities comes along. The opposite is true if the NFP represents a falling data.

A、Farm workers

B、Domestic workers in private households

C、Software developers

D、Government leaders

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