Not important only if...!
As we already know one of the main reasons that we track the economic data is to see how they are going to affect the market. The importance of US labor market data is mostly, because of FED and its policies since it is one of the main factors for FOMC members for their monetary policy decisions. Since we already had the FOMC meeting this week, this month's NFP numbers cannot be that much important for the market participants and investors, unless if we can see huge differences between the estimated and actual numbers.
September's jobs report missing number remembered again that currently, Labor shortage is one of the most important issues in the markets. In September, Payrolls increased only 194K, well less than estimates. One of the seasonal adjustments difficulties was in the education system that led to a 161K decline in public education after adjusting for typical seasonal hiring patterns. This seasonal adjustment issue should not be as severe in October.
Sub data and its details show that compared to the second half of 2020, we have 700K people that are out of the labor market just because of fears of COVID-19, while 1.6M fewer individuals are not working because of childcare. Despite all concerns and fears, since just a month ago unemployment ultra-benefits payment ended, we are waiting to see an increase in the number of job seekers and employed.
However, with economic recovery, the unemployment rate has eased 1.1 points over the past three months, so considering mentioned reasons, we are waiting to see a more decline in October and for the unemployment rate to edge down to 4.7%. Also, we are looking for average hourly earnings to rise 0.4%
In short in the end: This employment report is unlikely to influence monetary policy meaningfully unless if we can see a big difference between the estimated and actual numbers. Investors and market participants are expecting 450K net new jobs in this month’s NFP report, with the average monthly hourly earnings figure expected to rise 0.4%.
