Today, traders will receive the September employment numbers. This will be a closely-watched data especially after the numbers released by the Automatic Data Processing (ADP). The numbers were a surprise to many investors who expected the economy to add 187K jobs in September. Today, the figure of ADP will be confirmed when the Labour department releases the official numbers. In the past, the difference between the two has been large. Here are the key things to look out for.
This is the number of Non-Farm Payrolls which was created in the month with the exception of farm-related work and those employed in NGOs and the military. It is a good indicator whether the economy is adding jobs or not. It is one of the most-watched economic numbers in the country. Today, traders expect that the data from the labour department will show that the economy added 187K jobs in September. If the numbers beat the ADP’s 230K, the rout in the bond market may continue. Traders will also look at the two-month payroll revision.
The unemployment rate number shows the percentage of unemployed people who are of a working age. In today’s reading, traders expect the numbers to show that the unemployment rate declined to 3.8% from the previous 3.9%. Any number below 3.9% will be satisfactory to many traders. They will also watch the U6 unemployment rate. This is often said to be the real unemployment rate. This is because it adds workers who are working part-time jobs for economic reasons. The current U6 unemployment rate is at 7.4%.
Wages are very important to traders. The Philips curve usually says that the wages tends to rise as the unemployment rate falls. This is because firms are usually faced with the challenge of attracting talent. When wages rise, it usually sends a signal that the economy is healthy and that more tightening is appropriate. Traders expect the wages to have grown by 2.8% in September. This will be lower than the growth of 2.9% in August. The average week hours are expected to remain at 34.5.
The participation rate is an important number that shows the proportion of the of working age population that engages in the labour market. This is an important data. Today, the participation rate is expected to remain at 62.7%. An increase in the participation rate is a good thing for the economy.
Meanwhile, Canada too is expected to release the employment numbers. The Canadian unemployment rate is expected to decrease to 5.9% from August’s 6.0%. The net employment is expected to change to 30K while the hourly earnings expected to remain at 2.6%.
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