What to Expect From US Employment Data?

Markets are awaiting the release of US employment data during December at 13:30 GMT. This data will be necessary given its strong impact on the dollar and the currency market movements.

Markets expect to add 400,000 jobs in December, compared to 210,000 jobs previously recorded. Expectations also indicate a decline in the US unemployment rate to 4.1% compared to the 4.2% recorded last November.

Several US employment indicators showed good figures, and most of them indicated a general improvement in the conditions of the American labor market.

The ADP indicator of the change in the employment of the non-agricultural sectors rose to 807 thousand jobs last December, compared to the previous reading of 505 thousand jobs, which came higher than the market expectations that indicated an increase of about 400 thousand jobs only.

Last November, the US labor market data came negative. The change in employment recorded about 210 thousand people only vs. 533,000 expected, while the unemployment rate fell sharply from 4.6% in October to 4.2% in October November.

The CME Fed Watch tool shows that the market expects the first rate hike at the March meeting–67.5% when 30.5% only a month ago. What about a 4th hike? A not-negligible 20.3% see that as possible.

On the other hand, The weekly jobless claims reading rose to 207 thousand claims in the week ending December 31, compared to the previous week’s reading of 200 thousand, which came with a greater degree of negativity than expectations that indicated the possibility of a decline of 197 thousand claims.

The total number of unemployment benefits beneficiaries in the United States witnessed an increase to 1.754 million beneficiaries compared to the previous reading of 1.718 million beneficiaries, which came worse than expectations that indicated 1.688 million beneficiaries.

The US dollar is widely expected to receive significant support if US employment data exceeds expectations, above the 400,000 jobs barrier.