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Preview: Non-Farm Payroll announcement
4 February 2021The Non-Farm Payroll figures will be released this week by the US Bureau of Labor Statistics. The latest US jobs data will be released at 1:30 PM London time on Friday. It will be the first jobs report since Joe Biden was inaugurated as the 46th President of the United States last month.
Why is the announcement important?
Non-Farm Payroll is one of the most closely watched indicators. It is considered the most wide-ranging measure of job creation in the United States. An increase in the non-farm payrolls would suggest rising employment and potential inflation pressure – which would mean a possible rate increase by the Federal Reserve. A decline would indicate a slowing economy – which would mean a possible interest rate cut. The measure accounts for around 80% of the workers who contribute to the Gross Domestic Product. It does not include those who work on farms and also excludes private households, non-profit workers, and government employees.
Expectations
In December, the total Non-Farm payroll employment decreased by 140k largely caused by the increase of COVID-19 cases and efforts to contain the virus. The figure came as a surprise as analysts were expecting an addition of 71k jobs. The unemployment rate remained unchanged at 6.7%. Most significant job losses were in leisure and hospitality and in private education.
Analysts are expecting 40k jobs added in January. The unemployment rate is expected to remain unchanged at 6.7%.
Non-Farm Payroll numbers since January 2020
December: -140k
November: 245k
October: 638k
September: 661k
August: 1,371k
July: 1,763k
June: 4,800k
May: 2,509k
April: -20,500k
March: -701k
February: 273k
January: 225k
The unemployment rates since January 2020
December: 6.7%
November: 6.7%
October: 6.9%
September: 7.9%
August: 8.4%
July: 10.2%
June: 11.1%
May: 13.3%
April: 14.7%
March: 4.4%
February: 3.5%
January: 3.6%
Source: US Bureau of Labor Statistics
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