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US non-farm payroll and unemployment rate preview



US payroll and unemployment data sees increased relevance in lieu of recent inflation and GDP data drawing stagflation concerns.

US flagSource: Bloomberg
 Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Wednesday 04 May 2022 

When will the US report non-farm payroll and unemployment rate data?

The US Bureau of Labor Statistics is expected to release non-farm ayroll (NFP) and unemployment rate data for April on Friday the 6th of May 2022.

What does NFP/employment change data tell us?

The NFP data highlights the change in employed people across the United States in the previous month, excluding the farming industry.

What does the unemployment rate data tell us?

The unemployment rate highlights the number of people actively seeking work that are still unemployed, as a percentage of the total workforce in the preceding month.

US employment and stagflation

Friday’s NFP and unemployment data becomes increasingly important in lieu of recent Gross Domestic Product (GDP) and inflation prints.

There is growing concern and conversation around the possibility of stagflation in the world’s largest economy. While inflation tracks at multi-decade highs on the back of supply chain disruptions, the first quarter saw the US economy contracting by 1.4% where growth of 1% was expected.

Stagflation is generally considered to have three component parts: rising inflation, weak gross domestic product (GDP) and soft employment data. Stagflation is also considered a precursor to a recessionary environment.

In March’s reading, unemployment remained robust at 3.6%, although the number of jobs added to the NFP had missed consensus. Markets will be looking to see whether there is any deterioration in Friday’s unemployment rate and further deterioration in the NFP numbers.

ADP NFP figures a precursor to Friday’s NFP?

Automatic Data Processing Inc. (ADP) provide an early look and estimate towards the government's official NFP release.

ADP NFP data has suggested that less jobs than the previous month and than estimated were added to the payroll in April 2022. Refinitiv forecasts had arrived at a consensus of 382 000 jobs being added in April whereas only 247 000 were suggested from the ADP NFP data print.

The previous ADP NFP report for March 2022 suggested 479 000 jobs to have been added to the payroll.

What does ‘the street’ expect from the employment numbers?

A current consensus of Refinitiv estimates arrives at the following expectations for the upcoming employment data:

- non-farm employment change data is expected to show 390 000 jobs added to the payroll in April 2022, slightly less than the 431 000 jobs added in March 2022

- the unemployment rate is expected to improve to 3.5% in April 2022 from 3.6% in March 2022

- average hourly earnings are expected to have increased by 0.4% month-on-month (m/m)

The US Dollar Index/Basket (DXY)

US dollar index chartSource: ProRealTime


The dollar has softened marginally following the miss on ADP NFP data, although it has much in the way of upcoming catalysts to further direct short-term movement.

Notable catalysts being Wednesday evening's Federal Rates announcement and policy statement, as well as Friday’s (6 May) US jobs report.

As it stands right now technically, the long-term trend for the Dollar Index remains up. In the short-term the price continues to trade in overbought territory.

We also note the three steepening trendlines on our chart suggesting a ‘price blowoff’ or point of near-term capitulation may be nearing.

Our preference remains to keep a long bias on trades for the dollar index, looking to accumulate into near-term pullbacks towards support.


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