US Non-Farm payrolls and Unemployment rate for April are the second important event for the US dollar this week and are due on Friday, 5th May 2017 at 12:30 GMT.
Forecast for Non-Farm payrolls for April stands at 194 K, almost double from March’s downside surprise at 98K, which sent the dollar index from post-data high at 101.25 to the lowest levels since mid-November 2016 at 98.50 zone at the beginning of May.
Markets are closely watching releases from jobs sector which is one of the pillars of the economy and solid numbers in April would additionally support the general expectations in the markets about Fed’s interest rate hike in June.
We expect solid numbers on Friday after downbeat data previous month as one of key indicators for the Non-Farm payrolls, US ADP private sectors jobs report came at solid 177K in April. The ADP report closely missed forecast at 178K, but remains well below last month’s upside surprise at 263K
Forecast for Non-Farm payrolls stands around the average for the past six months (180K) and we expect gradual progress in US labor market after strong oscillations in past three months when NFP data spiked above 200K in Jan / Feb and dipped sharply lower in March.
We expect results between 150K and 180K that would signal stabilization and gradual recovery in coming months, as technical indicators point to the range of 100/200K.
Solid release at / above forecasted levels will be generally supportive for the dollar, however, other important releases, such as Unemployment rate and Average Earnings should be also closely watched, as any jump out of expected range would affect the impact of NFP data.
Average Earnings are forecasted at 0.3% in April, up from 0.2% in March and holding within 0.0% / 0.4% range in past couple of years.
The US Unemployment is forecasted to tick higher to 4.6% in April, compared to 4.5% in March but it has been is steep downtrend since the last quarter of 2009, descending to the lowest since June 2007