Live Data Coverage: February US NFP & Unemployment Rate

[MongiIG]

 

US NFP PREVIEW:

• Consensus forecasts are looking for jobs growth of +438K while the unemployment rate (U3) is anticipated to drop to 3.9% from 4.0%.
• However, a 25-bps rate hike later this month appears to be locked in, suggesting that a typically important US data release may not have a lasting impact on the market.
• Will the February US jobs report change the Federal Reserve’s rate hike path? We’ll discuss these questions and more in context of the February US nonfarm payrolls report starting at 8:15 EST/13:15 GMT. You can join live by watching the stream at the top of this note.

JOBS DATA MATTERS, BUT…

Diminished rates of COVID-19 omicron variant infections, have been a tailwind for the US labor market. US jobless claims have subsided over the past several weeks following their early-January bump. Surveys point to gains of +438K from +467K and for the US unemployment rate to fall to 3.9% from 4.0%.

But in light of comments made by Fed Chair Jerome Powell in recent weeks – that the US labor market has enough slack to absorb policy tightening – as well as this week – that a 25-bps rate hike is coming later this month – the fact of the matter is that the February US NFP report may not leave much of an impact.

Even if the US jobs report beats expectations, traders are likely to shrug off the data quickly and return their attention to headlines around Russia’s invasion of Ukraine.

ATLANTA FED JOBS GROWTH CALCULATOR (FEBRUARY 2022) (CHART 1)

The US economy continues to make progress towards ‘full employment’ as experienced pre-pandemic. According to the Atlanta Fed Jobs Growth Calculator, the US economy needs +378K jobs growth per month over the next 12-months in order to return to the pre-pandemic US labor market of a 3.5% unemployment rate (U3) with a 63.4% labor force participation rate.

We’ll discuss these questions and more in context of the February US nonfarm payrolls report starting at 8:15 EST/13:15 GMT. You can join live by watching the stream at the top of this note.

--- Written by Christopher Vecchio, CFA, Senior Strategist. DailyFX, 4th March 2022