Expectations for the US labor market data (NFP)

Today a monthly report on employment in the US will be published. The further rhetoric of the US Federal Reserve in the beginning of the year will largely depend on it. Given the latest Fed protocol, in which the stable growth of wages and labor market was noted, the market will follow closely this report.

After the December growth of workers in the non-agricultural sector of the US at 228K, the expected value of 190K looks very positive. Justification of hopes will be regarded by the market as a very positive note, not to mention the excess of the forecast. Doubts about the market can cause average hourly wages, which after the November decline shows sluggish growth. This is after a record growth in wages in October. Therefore, a value of 0.3% would be a very positive signal, when a value of 0.2% would have a more deterrent effect than a negative one. The unemployment rate remains at the level of the beginning of 2001, and the rate of creation of new jobs remains at a high level, which can cause a decrease in unemployment.

Overall expectations for the forthcoming report remain very positive, which is largely caused by the US Federal Reserve Protocol. Also, do not forget the seasonality, which is covered by this report. Therefore, one should not reject the possibility of not making forecasts.

Hanzenko Anton