The first Friday of every month sees the market get the official US Non-Farm Payrolls Report which is essentially the US employment figures. Why is this economic data announcement viewed as so important? It is because the US Federal Reserve set a benchmark some years ago (post the GFC) that US job creation was going to be its gauge to when it would raise interest rates.
Currently the US has an unemployment rate of 6.1% however the participation rate has substantially fallen since the GFC and job creation per month is what the US Fed wants to see and an increase in the number of people looking for work. The market will be satisfied if the US jobs report today is over 215,000 as the market is expecting 215,000. A private ADP jobs report for September showed the US created 213,000 jobs and whilst this report is not accurate every month it’s generally a good gauge over the long term.
Last month the US created only 142,000 jobs and I think this figure has a good chance of being revised upward and if the September figures beats estimates of 215,000 and the August figure is revised up closer to 200,000 then the US Dollar is likely to rally strongly immediately after the figures are announced. It all happens at 10.30pm AEST today.
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