The US jobs report will be released tomorrow at 8:30 AM ET. What to expect?

Tomorrow at 8:30 AM, focus returns back to economic data Economic Data Economic data typically comes in the form of news releases that are disseminated daily. This information is extremely valuable to retail and institutional forex traders, given the influence such data has on currency rates.Most of the major economic events that are released are reported by sovereign governments throughout the globe. Moreover, there are several economic data points that are released by private organizations that can also move the market.By and large, when new information becomes a Economic data typically comes in the form of news releases that are disseminated daily. This information is extremely valuable to retail and institutional forex traders, given the influence such data has on currency rates.Most of the major economic events that are released are reported by sovereign governments throughout the globe. Moreover, there are several economic data points that are released by private organizations that can also move the market.By and large, when new information becomes a Read this Term as opposed to central bank activity. The US jobs report for the month of January will be released.

What are the expectations?

• Nonfarm payroll is expected at 185K versus 223K last month.
• The three-month average is 247K, while the six-month averages 307K and the year average is 375K.
• The unemployment rate to rise by 0.1% to 3.6% from 3.5% last month.
• Average hourly earnings Earnings A company’s earnings represent its profits or net benefits as a result of its operation.Earnings are the net benefits of a corporation's operation. Earnings can be calculated as EBIT, i.e. earnings before interest and taxes, and EBITDA, i.e. earnings before interest, taxes, depreciation, and amortization.Earnings are valuable tools for investors of company shares as they can often highlight a company’s financial standing and performance. Better performances can result in strengthened share price A company’s earnings represent its profits or net benefits as a result of its operation.Earnings are the net benefits of a corporation's operation. Earnings can be calculated as EBIT, i.e. earnings before interest and taxes, and EBITDA, i.e. earnings before interest, taxes, depreciation, and amortization.Earnings are valuable tools for investors of company shares as they can often highlight a company’s financial standing and performance. Better performances can result in strengthened share price Read this Term for the month are expected to rise by 0.3%. That is unchanged from last month
• Average hourly earnings YOY are expected to dip to 4.3% from 4.6% last month. That would be the lowest since August 2021. Pre-pandemic, the year-over-year increases were between 2.8% and 3.4%
• Average work week is expected to remain unchanged at 34.3 hours
• Last month the participation rate came in at 62.3%
• Private payrolls are expected to rise by 190K
• Manufacturing payrolls are expected to rise by 6K versus 8K last month

The Federal Reserve and their central tendencies released in December forecast the unemployment rate to rise to 4.6%. That is up from 4.4% in their September projection. A Federal Reserve will update their central tendencies at the next meeting in March.

On Wednesday,

• the ADP nonfarm employment change came in weaker at 106K versus 253K last month. Weather was apparently a factor
• In contrast, the JOLTS job opening search to 11.01M from 10.44M in the prior month

There have been daily job cut announcement as companies look to cut costs in anticipation of slower growth. However measures like the JOLTS of job openings, suggest that there are plenty of jobs out there.

Initial jobless claims continued to also show a tight labor market. Today initial jobless claims came in at 183K. The four-week moving average is skimming along lower levels at 191.75K as well.

Also of note is that the annual benchmark revisions are also due to be released tomorrow. That could lead to a downward revision to many payroll numbers that we saw in the second half of 2022. That could throw a monkey wrench in interpreting the January data. So be aware.

The Fed would like to see some softening of the employment picture to ease their concerns about inflation. The Unemployment rate continues to skim along historical low levels. A 4.6% rate, projected by the Fed for the end of year 2023, has not been reached pre-pandemic since February 2017. The participation rate - although off the pandemic low - is still at lowest levels pre-pandemic going back to 1977. It is hard to make inroads into the unemployment rate if there is a shortage of workers. We will see. Maybe the Fed will orchestrate a recession that leads to more jobs pain and tick up the unemployment rate, but job losses beget job losses, and so it will be a tough job to pull off.