Release time: Friday, January 9, 2009 — 8:30 AM ET
There was virtually no good news in the November employment data, which came in at a loss of 533,000 jobs. Payrolls dropped and prior months levered were lowered. The average workweek dropped, indicating weak demand for those still employed.
This Friday’s news releases are expected to deliver a mixed bag.
- Experts and analysts are predicting a loss of 460,000 to 475,000 jobs and while that is grim, it is better than the November numbers.
- The average work week is expected to remain steady at 33.5 hours.
- The unemployment rate is expected to rise to 7.0%, 0.3% higher than the previous report.
The ADP National Employment Report has already reported that private sector jobs fell by a greater-than-expected 693,000 in December. These reports have increased the level of speculation by industry analysts and economists. President-Elect Barack Obama opened his first news conference since winning the presidential election by saying that this grim employment report was sobering, and calling for a second stimulus plan and extending unemployment benefits to help struggling Americans.
For week ending December 27, the Labor Department reported that the advance figure for seasonally adjusted initial claims was 492,000, a decrease of 94,000 from the previous week’s revised figure of 586,000. They also reported a four-week moving average of 552,250, a decrease of 5,750 from the previous week’s revised average of 558,000.
Wall Street had seemed to be absorbing poor economic and corporate news a little better than it was in late November, however warnings from tech giant Intel left stocks with their biggest losses in a month on Wednesday. Some investors have been betting on a recovery in the second half of 2009 or by early 2010. This will be put to the test on Friday morning with the Labor Department’s report.
What is the NFP report?
Of all the world monthly economic reports, the monthly U.S. Non Farm Report (NFP) is the most highly anticipated and has the most dramatic impact on the currency market.
The report, which is released on the first Friday of each month and states the previous month’s numbers, provides detailed industry data on employment, hours and earnings of workers on nonfarm payrolls. These numbers are the best way to gauge the current state of the US market as well as the direction that the economy is heading.
What’s more, the employment numbers provided by the report are used by the Fed to shape their interest rate policies. The health of the U.S. economy and interest rates translate to the strength or weakness of the U.S. dollar.