US Macro Updates

The One Stop Portal for US Macroeconomic Data. Simplified and Summarized! 

We simplify and summarize key data so that you don’t have to spend hours reading confusing and long media releases. Read key economic releases and major events here in under 2 minutes. And we will explain the key takeaway for you. Stay informed and form a robust view on macroeconomic matters to aid your successful investment decisions

US Non-Farm Payrolls


7th Aug 2026 NEW

Key takeaway: Non-farm payrolls are the most closely watched labour market indicator in the United States, providing a monthly snapshot of employment across all sectors except agriculture, government household employees, and a handful of other categories, making it the definitive measure of whether the broader economy is creating or shedding jobs. Over the past one to two years, payroll growth had been gradually cooling from the robust post-pandemic surge, with monthly gains trending lower as the economy adjusted to tighter financial conditions and the Federal Reserve’s extended period of restrictive monetary policy worked its way through the labour market. The July 2026 reading of 158.858 million, representing an outright decline of 23,000 jobs on the month, marks a notable deterioration and signals that the labour market may have shifted from a slowdown into an outright contraction phase. A negative payrolls print is a relatively rare and significant event, and coming against a backdrop of already-slowing growth momentum, it is likely to draw immediate attention from policymakers at the Federal Reserve. For the Fed, this data substantially strengthens the case for rate cuts, as a contracting labour market removes the primary argument for holding rates at restrictive levels and shifts the balance of risks firmly toward supporting growth and employment. On the wage and inflation front, a weaker jobs market typically eases upward pressure on wages, which in turn reduces one of the stickier components feeding into services inflation, providing the Fed with additional comfort to ease policy. Consumer spending, which has been a key pillar of US economic resilience, now faces a more direct headwind, as job losses reduce household income and confidence, raising the risk of a broader pullback in demand in the months ahead.

Non-Farm Payrolls decreased 23.000k in Jul to 158.858mn.

2nd Jul 2026 NEW

Key takeaway: Non-farm payrolls are the most closely watched labour market indicator in the United States, providing a comprehensive monthly snapshot of employment conditions across nearly all sectors of the private and public economy, and serving as a critical input for Federal Reserve policy decisions. Through most of the post Covide recovery years, the US economy had been adding jobs at a pace broadly in the range of 150,000 to 250,000 per month, reflecting a gradually cooling but still resilient labour market following the post-pandemic hiring surge. However, hiring was more subdued in the full year of 2025 at an average 0-50K per month. The June 2026 reading of just 57,000 net new jobs shows a number mostly in line with the recent months but falls well below the threshold typically associated with a healthy expansion and signalling a potential softening in labour demand. One of the key reasons for the drop in monthly job prints has been significantly lower immigration. This has reduced the growth of labor supply and consequently reduced new jobs added through the economy. A print of this magnitude nonetheless will intensify debate within the Federal Reserve about the appropriate path for interest rates, as a weakening jobs market reduces the urgency of maintaining restrictive monetary policy and could accelerate the timeline for rate cuts. Slower job creation also carries implications for wage growth, as a looser labour market tends to reduce workers’ bargaining power, which may ease services inflation but could equally weigh on household income expectations. Weaker income growth, combined with reduced employment confidence, risks dampening consumer spending, which remains the primary engine of US economic activity. Markets and policymakers alike will be watching subsequent releases closely to determine whether this represents a temporary disruption or the beginning of a more sustained labour market downturn.

Non-Farm Payrolls increased 57.000k in Jun to 158.984mn.

5th Jun 2026 NEW

Key takeaway: Non-farm payrolls are the most closely watched labour market indicator in the United States, providing a monthly snapshot of employment across all sectors excluding agricultural workers, private household employees, and non-profit organisation workers, making it a critical input for Federal Reserve policymakers, bond markets, and equity investors alike. Over the past two years, monthly job gains have broadly decelerated from the elevated post-pandemic recovery pace, with the labour market gradually normalising toward a more sustainable trend after the outsized additions seen in 2022 and early 2023. The May 2026 reading of 172,000 net new jobs sits in line with that cooler but still constructive trend, suggesting the economy continues to generate employment at a moderate pace without the kind of overheating that would alarm policymakers. A gain of this magnitude is broadly consistent with what the Federal Reserve would consider a balanced labour market, neither weak enough to accelerate rate cuts nor strong enough to reignite fears of a wage-price spiral. With payrolls holding firm, consumer spending capacity remains supported, as employment income is the primary driver of household expenditure in the United States. Wage inflation pressures will remain a focal point alongside this headline figure, since sustained job growth can keep upward pressure on earnings even as the headline pace of hiring moderates. Overall, May’s print reinforces a picture of a labour market that is softening gradually rather than deteriorating sharply, giving the Fed continued room to proceed cautiously on monetary policy.

Non-Farm Payrolls increased 172.000k in May to 159.001mn.

8th May 2026 NEW

Key takeaway: Non-farm payrolls are the most closely watched labour market indicator in the United States, providing a monthly snapshot of employment across nearly all sectors of the private and public economy, and serving as a critical input for Federal Reserve policy decisions. Over the past 12 to 24 months, job growth had been gradually moderating from the robust post-pandemic pace of gains that frequently exceeded 200k to 300k per month, with more recent months settling into a range broadly consistent with a cooling but still resilient labour market. The April reading of 115k sits at the softer end of that recent trend, signalling a meaningful step down in hiring momentum that will attract significant attention from policymakers and market participants alike. A print at this level suggests the labour market may be losing more traction than previously anticipated, which could ease some of the upward pressure on wages and, in turn, services inflation that has remained stubbornly elevated. For the Federal Reserve, a softer payrolls number of this magnitude adds weight to the case for rate cuts, as it reduces the risk that a tight labour market continues to fuel price pressures. Consumer spending, which is heavily dependent on employment income, may also begin to show signs of strain if hiring continues to decelerate at this pace heading into the summer months. Overall, the April report introduces a more cautious tone into the economic outlook and will keep the Fed carefully balanced between its dual mandate objectives.

Non-Farm Payrolls increased 115.000k in Apr to 158.736mn.

Non-Farm Payrolls – April 2026: +115.000k (158.736mn)

3rd Apr 2026
Key takeaway: The Bureau of Labor Statistics released the March 2026 Employment Situation report on April 3, delivering a headline number that strongly beat expectations. Total nonfarm payroll employment increased by 178,000 in March, with the unemployment rate holding at 4.3%, as job gains occurred in health care, construction, and transportation and warehousing, while federal government employment continued to decline. The result came in well above market expectations of around 60,000 and was the strongest monthly gain since December 2024, following a revised decline of 133,000 in February when a strike in the healthcare sector had weighed heavily on employment. However, the headline significantly overstates the underlying momentum. Healthcare alone contributed 76,000 jobs — more than 2.6 times its trailing 12-month average — driven largely by the resolution of a physicians’ strike at Kaiser Permanente that had pulled roughly 37,000 workers off payrolls in February; strip out healthcare entirely and the underlying March print was approximately 102,000. Construction added 26,000 jobs, transportation and warehousing contributed 21,000, manufacturing added 15,000, and federal government employment fell by 18,000. On wages, average hourly earnings rose 0.2% on the month, with annual earnings growth at 3.5%. Critically, analysts note that the entire survey reference period predated the sweeping tariff announcements of early April (pharmaceuticals and steel, aluminum and copper, meaning the first NFP report to capture actual tariff-period labor market conditions will be the May 8 release covering April payrolls.   

6th Mar 2026

Key takeaway: The US government shutdown in October last year had caused market participant to fly a bit blind due to lack of economic data, including the most important data points of monthly job creation and the unemployment rate. The BLS released delayed data on the October and November jobs numbers on 16th Dec 2025, which had shows that net jobs added in the 2 months were mostly zero. Then in early January, the BLS released data for December which showed jobs grew by a relatively healthy 50K. That was followed by the January print that was an absolute blockbuster with 130K jobs added compared to consensus expectations of +66K. Even though that print had come on the back of some weak economic data a day prior in the form of retail sales and employment cost index, the healthy jobs print vindicates the Fed’s decision to pause the rate hiking cycle in January. However, the latest print for February turned out to be a dampener. The latest report showed that nonfarm payrolls declined by 92,000 in February, well below expectations for a modest gain. The unemployment rate edged up to 4.4%, compared with 4.3% in the previous month, indicating some softening in overall labor market conditions. Meanwhile, average hourly earnings increased by 0.4% month-over-month and were 3.8% higher than a year earlier, suggesting that wage growth remains relatively firm despite the weaker payrolls figure. Job losses were recorded across a number of sectors, including health care, information, manufacturing and transportation, while only a handful of sectors posted modest gains. Taken together, the report points to a noticeable loss of momentum in the US labour market during February, even as wage growth remains relatively elevated  

11th Feb 2026

Key takeaway: The US government shutdown in October last year had caused market participant to fly a bit blind due to lack of economic data, including the most important data points of monthly job creation and the unemployment rate. The BLS released delayed data on the October and November jobs numbers on 16th Dec 2025, which had shows that net jobs added in the 2 months were mostly zero. Then in early January, the BLS released data for December which showed jobs grew by a relatively healthy 50K. The market was looking forward to the latest release of the January payroll data which came out on 11th February, now mostly on regular schedule after the government shutdown hiccups. The latest print turned out to be absolutely blockbuster with 130K jobs added in January compared to consensus expectations of +66K. Even though the print came on the back of some weak economic data a day prior in the form of retail sales and employment cost index, the healthy jobs print vindicates the Fed’s decision to pause the rate hiking cycle in January. If job creation continues to remain healthy in 2026, we might not see another rate cut all the way till 2027. The unemployment rate also fell unexpectedly from 4.4% to 4.3%. Average hourly earnings growth at 0.4% was also more than expected. The labour participation rate also moved up from 62.4% to 62.5. Lastly, the revision in jobs due to the annual benchmarking exercises was also in line with expectations and in line with what was announced by the BLS last year in October (-900K). In general, this report was favourable on almost all counts and it showed itself in the form of higher yields in the treasury market.  

9th Jan 2026

Key takeaway: The BLS released delayed data on the October and November jobs numbers on 16th Dec 2025. The market was eagerly anticipating today’s release of jobs added in the month of December. The latest NFP report shows headline jobs increased by 50K in December – a decent figure, but lower than consensus expectations of 66K. Moreover, the last 2 months jobs number was also revised down by 76K. The December release further supports the case that hiring is very low in the current economy. However, the argument still that the lower job creation is on account of much lower immigration in the US this year compared to history. The Household survey showed that the unemployment rate fell from 4.6% (in previous month’s release to 4.4%). The 2 data points combined almost certainly take a January rate cut off the table. The labour participation rate was mostly steady at 62.4%. Average hourly earnings increased 0.3% m-o-m and 3.8% y-o-y. Wages have mostly been resilient and given inflation has been relatively modest, real wage growth has been decent over the past year as well. Average weekly hours were slightly lower at 34.2.   

16th Dec 2025

Key takeaway: (Delayed release due to govt shutdown) – Publication of the October and November jobs numbers was delayed due to the government shutdown. The latest release combines data for both the months of October and November. The latest NFP report shows headline jobs declined by a substantial 105K in October but gained 64K jobs in November. With the latest release, jobs have declined in 3 months – June, August and October. The level of employment is mostly the same since the mid of the year. Even though the latest print shows above consensus 64K jobs added in November, market participants perceive the labour market to be quite weak. The Household survey for November also shows the unemployment rate has spiked up from 4.4% to 4.6%. Nonetheless, even at 4.6%, it remains historically low. The labour participation rate was mostly steady at 62.5%. Average hourly earnings increased 0.1% m-o-m and 3.5% y-o-y. Wages have mostly been resilient and given inflation has been relatively modest, real wage growth has been decent over the past year as well. Average weekly hours were mostly unchanged at 34.3.   

21st Nov 2025

Key takeaway: (Delayed release due to govt shutdown) – The latest NFP report for the month of September showed headline jobs grew by a strong 119K against consensus expectations of an increase of 50K. However, last month’s number was revised down from +22K to minus 4K. That makes August the 2nd month in the year after June to record a negative jobs print. Labor data has been consistently turning lower over the past few months. Recent ADP prints of private payroll have turned substantially lower. JOLTS data has also been indicating lower job openings. However, the lack of data from the government shutdown and the continued resilience in equities has cast a shadow over a December rate cut. The Household survey showed the unemployment rate ticking slightly higher from 4.3% to 4.4%. Nonetheless, even at 4.4%, it remains historically low and is one of the reasons cited by Chair Powell in the past to keep rates elevated. The labour participation rate was mostly steady at 62.4%. Average hourly earnings increased 0.2% m-o-m and 3.8% y-o-y. Wages have mostly been resilient and given inflation has been relatively modest, real wage growth has been decent over the past year as well. Average weekly hours were mostly unchanged at 34.2.   

5th Sep 2025

Key takeaway: The latest NFP report for the month of August showed headline jobs grew only by 22K against consensus expectations of 75K. Labour data has been consistently turning lower over the past few months. Recent ADP prints of private payroll have turned substantially lower. JOLTS data earlier in the week had indicated lower than expected job openings. And finally today the official NFP number has indicated a mere 22K jobs were created in the month of August. This string of weak labour data points has made a September rate cut a certainty. In fact, there also exists an outside chance of a 50 bps rates cut – dependent on the CPI print next week. Jobs for June and July combined were revised down by 21K. While that is not a substantial revision, the revised data meant June was the first negative jobs print since December 2020! The unemployment rate also ticked slightly up from 4.2% to 4.3%. This rate remains historically low and is one of the reasons cited by Chair Powell to keep rates elevated. The labour participation rate was mostly steady at 62.3%. The number of unemployed increased by a substantial 148K. Average hourly earnings increased a decent 0.3% m-o-m, in line with consensus expectations, continuing to demonstrate that wages have been resilient. However, on a y-o-y basis, earnings growth declined from 3.9% to 3.7%. Given inflation has been relatively modest, real wage growth has been decent over the past year as well. Weekly hours decreased from 34.3 to 34.2.   

1st Aug 2025

Key takeaway: The latest NFP report for the month of July showed headline jobs grew only by 73K against consensus expectations of 106K. In the previous month of June, we had witnessed a softer than expected ADP employment report, but a healthy NFPP number. Its the opposite this month. The ADP print showed a net addition of 104K jobs while the NFP printed a much more underwhelming number. The negative surprise spooked markets with treasuries rallying and the Nasdaq down 2.5%. However, the most important point to note in the latest release was the revision to previous months’ data. Jobs for May and June combined were revised down by a substantial 258K. The unemployment rate also ticked slightly up from 4.1% to 4.2%. The labour participation rate was mostly steady at 62.2%. The Household survey showed the number of unemployed increased by a substantial 221K. Once again. similar to the previous month’s data, it might be too soon to conclude that the labour market is weakening in a material way. Average hourly earnings increased a decent 0.3% m-o-m, in line with consensus expectations. We saw a relatively healthy ECI print yesterday as well which provides evidence that wages have been growing. Given inflation has been relatively modest, real wage growth has been decent over the past year as well. Weekly hours increased from 34.2 to 34.3.   

3rd Jul 2025

Key takeaway: The latest NFP report for the month of June showed headline jobs grew 147K against consensus expectations of 111K. Market participants were watching this release especially closely since the ADP data yesterday had been substantially weak and continuing jobless claims have been rising the past few months. The positive number surprised markets with yields immediately moving higher. This is also the 3rd month in a row post the tariff related volatility seen in early April, that the NFP report has printed a quite healthy jobs number. Moreover, unlike recent months when the jobs number has been revised meaningfully down in the subsequent month’s release, the latest June release showed employment being revised higher by 16K. Despite the solid headline print, there were a number of details in the release which point to a weaker jobs market. Firstly, most of the employment increase was on account of government payrolls which rose by 73K after having printed soft numbers in the past few months. On the other hand, Private payrolls increased by only 74K which was much lesser than consensus expectations of 105K. Second, while the unemployment rate fell from 4.2% to 4.1%, the decrease was also due to people leaving the workforce. The participation rate dropped from 62.4 to 62.3. Lastly, average hourly earnings growth at 0.2% m-o-m was weaker than consensus expectations of 0.3%. The y-o-y figure of 3.7% was also lower than consensus estimates of 3.8% and also lower than previous month’s 3.9%. Weekly hours also declined from 34.3 to 34.2.   

6th Jun 2025

Key takeaway: The latest NFP report for the month of May showed headline jobs grew 139K against consensus expectations of 126K. While the print was not substantially higher than consensus expectations, this was the 2nd month in a row post the tariff related volatility seen in early April, that the NFP report has printed a quite healthy jobs number. However, importantly, payroll data for the previous 2 months was also revised down by a cumulative 95K jobs. Despite the large revision downwards, markets surprisingly  perceived this print as positive and rallied sharply into the day. Even with the revisions, average jobs gains each month continue to be in the 150K range and above the break even rate most economists estimate for the US. Market participants are also closely watching the government jobs number, in light of recent DOGE initiatives. Government payrolls had increased a small 10K in April and within that number Federal government employment declined by 9K. Federal government employment declined by 22K in May. This is the 4th consecutive month of Federal government employment declines. On the Household Survey front, unemployment rate was mostly unchanged at 4.2%. The labour force participation rate declined from 62.6% to 62.4%. Average hourly earnings came in slightly higher than expected at 3.9% y-o-y and 0.4% m-o-m. However, that still is a decent number and would continue to keep the Fed on the back foot. Lastly, weekly hours remained the same at 34.3.   

2nd May 2025

Key takeaway: Once again, a lot to look forward to in the latest NFP release. Firstly, this is the first full month of data post “Liberation Day” tariff announcements. Recession fears have grown strongly on the back of the tariff announcements and the subsequent market collapse. The latest release pours a bit of cold water on those fears. Headline jobs grew 177K against consensus expectations of 130K. That is a still strong job market. Average jobs gains each month continue to be in the 150K range and above the break even rate most economists estimate for the US. Market participants are also closely watching the government jobs number, in light of recent DOGE initiatives. Government payrolls had increased a small 10K in April and within that number Federal government employment declined by 9K. This is the 3rd consecutive month of Federal government employment declines. However, the key point to note is that the quantum of declines have been relatively small. On the Household Survey front, unemployment rate was mostly unchanged at 4.2%. The labour force participation rate was also mostly unchanged at 62.6%. Average hourly earnings came in slightly lower than expected at 3.8% y-o-y and 0.2% m-o-m. However, that still is a decent number and would continue to keep the Fed on the back foot. Lastly, weekly hours remained the same at 34.3.   

4th Apr 2025

Key takeaway: There was a lot to look forward to in the latest NFP release. Firstly, the data was being released a day after “Liberation Day” tariff announcements. Recession fears have grown strongly on the back of the tariff announcements and the subsequent market collapse. Moreover, market participants are also closely watching the employment effects of DOGE initiatives. Government payrolls had increased a small 11K in February and within that number Federal government employment had declined by 10K. Total non-farm payroll employment increased by a substantial 228K jobs in the month of March, significantly higher than consensus expectations for an increase of 137K. To some extent, that was a relief for the markets. Private payrolls increased by 209K and government payrolls increased 19K. However, last month’s jobs number was revised down by 34K from 151K to 117K. Similarly, the government jobs number was also revised down from 11K to 1K. The latest report also showed Federal government employment decreasing by 4K. The general consensus is that the full effect of DOGE cuts in federal government employment will only become evident a few months later. The unemployment rate increased a bit from 4.1% to 4.2%. Average hourly earnings came in slightly lower than expected at 3.8%. However, that still is a decent number and would continue to keep the Fed on the back foot. Lastly, weekly hours remained the same at 34.2.   

7th Mar 2025

Key takeaway: NFP data for the month of February is here. Jonathan Ferro on Bloomberg started the news piece by saying “the news here is that there is no news”. Total non-farm payroll employment increased by a decent 151K jobs in the month of February against consensus expectations for an increase of 160K. So not much of a surprise there. Yet, the 10 year yield wildly oscillated between 4.29% and 4.20% immediately after the release. Just another sign of a confused market! Private payrolls increased by 140K and government payrolls increased 11K. The government payroll number was substantially lower than the 44K in the previous month of January. All eyes are and will be on the government jobs numbers in the near future, thanks to the DOGE initiatives. The unemployment rate increased a bit from 4.0% to 4.1%. However, that might mostly be attributable to the fact that participation rate reduced from 62.6% to 62.4%. Average hourly earnings came in slightly lower than expected at 4.0%. But that is still a very good number and the Fed will be closely watching wage increase data. Lastly, net revisions on payrolls for December and January were negligible.  

7th Feb 2025

Key takeaway: Total non-farm payroll employment increased by a decent 143K jobs in the month of January. The figure was slightly lower than consensus expectations for an increase of 169K. However, the weaker than expected jobs number was offset by 3 major factors. First, the unemployment rate declined from 4.1% to 4.0%. Second, average hourly earnings posted a stunning 4.1% compared to expectations of 3.8%. Lastly, payrolls for November and December were revised upwards by a substantial 100K jobs. The labour market continues to be tight. There has been some resurgent concerns on inflation as well. The latest report does nothing to douse concerns of resurgence in inflation with a yet strong labour market and strong wage growth. The unemployment rate drop from 4.1% to 4.0% is especially noteworthy, though it was mostly on account of annual population adjustments to household survey estimates. After increasing earlier in 2024 and causing some market consternation, the unemployment rate has been mostly steady for the past 6 months. Similarly, the 4.1% increase is average hourly earnings is very noteworthy. Yet, it is also key to note that a factor contributing to this rise was a drop in the denominator ie. average work week falling by 0.1 hour to 34.1 hours in January  

10th Jan 2025

Key takeaway: Total non-farm payroll employment increased by a solid 256K jobs in the month of December. The figure was substantially higher than consensus expectations for an increase of 164K. Yields have generally been rising in the months post the first Fed rate cut in September and had picked up steam post the elections in November. There has been some resurgent concerns on inflation as well. A hotter-than-expected jobs report only adds fuel to that fire.The Establishment Survey now shows that payroll employment in the US rose by 2.2mn in 2024 (an average monthly gain of 186K jobs). While this figure is lower than the 3.0mn increase in 2023, it is nonetheless a very strong number and indicative of a tight labour market. Average hourly earnings rose by 3.9% y-o-y, slightly lesser than the expected 4%. The unemployment rate per the Household Survey remained steady at 4.1%. After increasing earlier in the year and causing some market consternation, the unemployment rate has been either 4.1% or 4.2% for the past 7 months. Yet it is also noteworthy that, in contrast to the Establishment Survey, the Household Survey shows the total employed population to have grown in 2024 by only 500K. The contrasting signs in the US economy thus continue. The Establishment Survey continues to paint a picture of a tight job market and plentiful job and wage growth whereas the Household Survey does not completely support that narrative.  

6th Dec 2024

Key takeaway: Total non-farm payroll employment increased by 227K jobs in the month of November. The figure was mostly in line with consensus expectations for an increase of 220K. This month’s job report comes on the back of the mere 12K jobs which were added in the month of October due to the hurricane and strike effects. The revisions in the job numbers for the past 2 months was meaningful but not very sizeable. The Sep and Oct job numbers were revised up by 56K with October specifically revised up from 12K to 36K. The key takeaway in the latest NFP report was from the Household Survey. The Unemployment rate ticked up marginally from 4.1% to 4.2%. By itself, that is not a large change m-o-m. However, it needs to be viewed in conjunction with the fact that the participation rate fell from 62.6 to 62.5 m-o-m. The actual number of unemployed, per the survey, increased 161K. In fact over a larger period of time – specifically from Jan 2023 till now, the Household Survey shows that the overall employment level in the US has not changed much at all. The second important point to note in the latest data was that average hourly earnings increased a solid o.4% m-o-m and 4.0% y-o-y. Wage increases are still much above the 2%-3% level that the Fed thinks is consistent with a target of 2% inflation. The contrasting signs in the US economy thus continue. The Establishment Survey continues to paint a picture of a tight job market and plentiful job and wage growth whereas the Household Survey does not completely support that narrative.  

1st Nov 2024

Key takeaway: Total non-farm payroll employment increased by a mere 12K jobs in the month of October. Consensus expectations were for an increase of about 100K. Needless to say, the headline number was significantly low both in comparison to recent trends as well as consensus expectations. However, the jobs number was expected to be materially lower due to the impact of the 2 hurricanes and the strike at Boeing. The more important data point in the latest release was that the jobs numbers for the previous 2 months of August and September were revised down by a cumulative 112K. It is worthwhile to recollect that it was the blockbuster September payroll report of 254K which had reinvigorated the soft landing or no landing expectations of the economy. Hence, a material revision of 112K jobs over the past 2 months is key to note. However, bond markets have largely shrugged aside the report and yields continue their march higher. The Household Survey also did not indicate a major change in the unemployment data. The unemployment rate remained at 4.1% and the number of unemployed people was little changed at 7.0 mn. Average hourly earnings increased a solid 0.4% m-o-m and 4.0% y-o-y. The recent Employment Cost Index also showed about 3.8% increase in compensation costs on an annual basis. The key point to note here remains that real wages continue to be in positive territory and will hence remain a tailwind to consumption. 

4th Oct 2024

Key takeaway: A blockbuster jobs number! Yet again! The labour market has surprised us on the upside numerous times over the past 2 years. This month was yet another one! 254K jobs in the month of September against an expectation of 125K jobs. Hold on… this is not it. Total NFP was revised up by 55K for July and 17K for August! The unemployment rate fell from 4.2% to 4.1%. Average hourly earnings increased 0.4% m-o-m and 4.0% y-o-y. This measure is up for the past 2 consecutive months from 3.7%. Employment in food services and drinking places, for instance, increased 69K in September, well above the average monthly gain of 14K over the past 12 months. Construction employment added 25K jobs. In summary, a blockbuster report. Little surprise that 10 year yields are up 11 basis points in a sharp reaction and equities are celebrating a soft landing.  

6th Sep 2024

Key takeaway: The long anticipated cracks in the labour market are finally starting to show. The latest BLS report showed total non farm payroll employment rose by 142K in August. While this number was higher than the previous month’s print of 114K, it was low compared to the average jobs print that the market has gotten used to in the previous couple of years. It was also lower than consensus expectations of 164K. More importantly, the previous 2 months’ data were revised downwards by a cumulative 86K jobs. Undoubtedly, whether this pace of decline accelerates in the future will have significant bearing on markets as well as Fed policy. The slight silver lining in the latest data was that the Household Survey showed the unemployment rate decreased from 4.3% to 4.2%, albeit marginally. Average hourly earnings increased by 0.4% m-o-m and 3.8% y-o-y. This number slightly higher than consensus expectations of 3.7%. But, market participants are mostly over the aspect of looking for wage inflation. Average weekly hours edged down to 34.3.     

2nd Aug 2024

Key takeaway: The long anticipated cracks in the labour market are finally starting to show. The latest BLS report showed total non farm payroll employment rose by a muted 114K in July. The number was substantially lower than consensus expectations of +176K. Similar to last month, the previous month’s job numbers were also revised down. Cumulatively, May and June was revised down by 29K. Downward revisions in jobs have been a constant feature of the NFP data in recent months. Even the Fed chair has acknowledged that NFP might be overestimating job creation. The unemployment rate also increased from 4.1% to 4.3% – triggering the famed Sahm rule as an indicator of recession. The Unemployment Rate now stands 0.9% above this cycle’s low achieved in 2023. The bearish report was enough to set the cat amongst the pigeons. Equities are selling off and bonds are rallying. Average hourly earnings increased by 0.2% m-o-m and 3.6% y-o-y. This key number was also lower than consensus expectations of 3.7%. The wage growth number also stands substantially below this cycle’s high of 5.6% in 2022. Average weekly hours edged down to 34.2.     

5th Jul 2024

Key takeaway: The latest BLS report showed total non farm payroll employment rose by a massive 206K in June. The number was also higher than consensus expectations of +190K. However, the true story of the latest NFP report was in the revisions of previous months’ jobs data and the rise in the unemployment rate. Jobs added in the months of April and May were revised down by a substantial 111K. Downward revisions in jobs have been a constant feature of the NFP data in recent months. Even the Fed chair has acknowledged that NFP might be overestimating job creation. The unemployment rate, on the other hand, also increased from 4.0% to 4.1%. The disparity between the Establishment Survey and the Household Survey has been a notable feature over the past couple of years and June’s report once again highlighted that divergence. The Unemployment Rate now stands 0.7% above this cycle’s low achieved in 2023. In summary, even though job gains printed a healthy 206K, the discrepancy with the rising unemployment rate in the Household Survey data is bound fuel some bearishness in the overall sentiment. Bond yields were down in response as well. Average hourly earnings increased by 0.3% m-o-m and 3.9% y-o-y. The y-o-y increase is finally below the key threshold of 4.0% – the first time since 2021. Average weekly hours was unchanged at 34.3.     

7th Jun 2024

Key takeaway: The most important data point of the month is here and true to recent history, it has once again flummoxed market participants with the outcome. The latest BLS report released on 7th June 2024 showed total non farm payroll employment rose by a massive 272K in May. The unemployment rate, on the other hand, increased from 3.9% to 4.0%. The disparity between the Establishment Survey and the Household Survey has been a notable feature over the past couple of years and May’s report once again highlighted that divergence. The Establishment Survey shows the labour market is still strong and jobs are being generated at a more-than-healthy pace. Leisure and Hospitality, which is the key focus sector within the jobs report, showed hiring continues to be robust with an addition of 42K jobs in May. To some extent, this number also contrasts to more muted job gains shown in the private ADP data in the Leisure and Hospitality space. Government employment also continued to trend up with the addition of 43K jobs in May. On the other hand, the Establishment Survey showed the number of unemployed increased by 157K in May and unemployment rate inched up to 4.0%. Moreover, the unemployment rate for Black and Hispanics has been increasing at a faster rate compared to the overall unemployment rate – a metric that is also keenly observed by the Fed. In summary, even though job gains printed a healthy 272K, the discrepancy with the rising unemployment rate in the Household Survey data is bound fuel some bearishness in the overall sentiment. Average hourly earnings increased by 0.4% m-o-m and 4.1% y-o-y. Both number were higher than consensus estimates. Average weekly hours was unchanged at 34.3.     

3rd May 2024

Key takeaway: The latest BLS report released on 3rd May 2024 showed total non farm payroll employment rose by a lower-than-expected 175K. The unemployment rate increased slightly from 3.8% to 3.9%. Job growth has surprised everyone to the upside for most of the past 9-12 months after a couple of weak prints in the middle of 2022. The tightness in the job market, the still elevated rate of wage increases and the dynamics of the bond market caused yields to rise substantially over the past year. Hence, it is not surprising to see the market grab the slightest of opportunity to brings yields down and rate cut expectations back, with both hands. The 10 year yield is back down below 4.5% and rate cut expectations in the Fed Funds futures market were boosted as well. However, it is equally important to note that this was just 1 weak print in an otherwise sea of robust job prints month after month for the past 2-3 years. Another point to note was that jobs added in the government sector were substantially lower (+8K compared to an average of 55K for the past 12 months). On the other hand, job growth in healthcare, transportation and retail trade continued to be robust. Lastly, average hourly earnings increased only 0.2% m-o-m or 3.9% y-o-y. Both numbers were lower than expectations. This is the first time wage growth number has been below 4% since before the pandemic. While still higher than pre-pandemic levels, this number has ceased to be a cause of concern with inflation having come down from its 2022 highs. Average workweek edged down by 0.1 hour to 34.3 hours.    

5th Apr 2024

Key takeaway: The latest BLS report released on 5th April 2024 showed total non farm payroll employment rose by a substantial 303K. The unemployment rate was little changed at 3.8%. The labour market continues to remain tight. After a few months os softer job gains in October and November 2023 (below 200K), jobs gains have been very substantial for the past 4 months. Even with the initial revisions, average job gains remain far too elevated compared to pre-pandemic levels and compared to the steady state job creation required in the US economy. Jobs were added primarily in primarily in healthcare, government, construction and leisure and hospitality. In each of these sectors, total employment now stands either at or above pre-pandemic levels. The unemployment rate from the Household Survey continues to be in a band of around 3.5% to 3.9%. Even though there has been chatter in the past about a divergence in the Establishment Survey and the Household Survey, the divergence has either been periodic or inconsistent. Hence it is difficult to state that the job creation numbers from the Establishment Survey are misleading. Lastly, average hourly earnings increased 0.3% m-o-m or 4.1% y-o-y. While still higher than pre-pandemic levels, this number has ceased to be a cause of concern with inflation having come down from its 2022 highs. The February and March data has also confirmed that the spike to 4.5% that we saw in January was caused by a reduction in total hours worked and not due to a genuine increase in wages. Average workweek edged up by 0.1 hour to 34.4 hours.    

8th Mar 2024

Key takeaway: The latest BLS report released on 7th March 2024 showed total non farm payroll employment rose by a substantial 275K. However, apart from the large headline increase, there were a number of aspects to consider in this report. Firstly and most importantly, the total jobs added in the previous 2 months of January and December were revised down by a substantial quantum – 167K. Just to recap, the keenly watched jobs report had shown a slowing trend in jobs added (below 200K) in the months of October and November. Combined with declining JOLTS data, the expectation was that the labour market was coming more into balance. However, December and January recorded stellar jobs prints causing much consternation amongst market participants on whether the labour market remains much too tight. Given this backdrop the sharp downward revisions were a key point to note. Secondly, the sharp rise in average hourly earnings in the previous report (from 4.1% to 4.5%) had also caused concerns about wages that remain too high. However, the rise in average hourly earnings in January were also significantly attributable to a drop in total hours worked. Average weekly hours had fallen from 34.3 to 34.1. February was a bit of a relief for the market on this front. Average hourly earnings increased a muted 0.1% m-o-m and lesser than expected 4.3% y-o-y. Similarly, average weekly hours ticked back up to 34.3. The third important point to note in the latest jobs data was the sharp rise in unemployment rate from 3.7% to 3.9%. This is the highest unemployment rate since early 2022 and approximately 0.5% higher than the low point of this cycle. The U6 rate (which takes into account the unemployed plus all persons marginally attached to the labour force and those who are employed part time because they cannot get a full time job) has increased from this cycle low point of 6.5% to 7.3% in February 2024. Lastly, the labour force participation rate was also unchanged at 62.5%. Easing of supply chains and increase in labour supply has been the central reason for disinflationary trends and any reversal down in the participation rate causes the Fed to take stern note.   

2nd Feb 2024

Key takeaway: 353K! That is the absolutely astounding number of jobs added in the month of January as per the latest BLS report released on 2nd Feb 2024. Moreover, even the December jobs number was revised upwards from 216K to 333K. Treasury yields had a sharp reaction. Yields which had moved down in response to the softer ADP report and ECI number moved sharply back up and above the 4.0% level. The job additions were also fairly broad based across industries. For instance, Retail Trade which had shown little net growth since early 2023, posted a 45K increase in jobs. One of the most important takeaways of the latest job print was the sharp decline in hours worked. The average workweek for all employees decreased from 34.3 to 34.1. It is worth noting that it is lower by a substantial 0.5 hours on the year and 0.9 hours since the peak in March 2021. The lowest level in the recent past has been 33.7 in mid 2009 during the GFC. Average hourly earnings rose up from 4.3% to 4.5% y-o-y. While this increase is concerning and higher than expectations (4.1%), it can probably be attributed to the sharp drop in hours worked instead of actual increases in wages. Nonetheless, the Fed is bound to take note of this wage increase data. However, while this number is still above the 2.5% to 3.0% that the Fed thinks is consistent with a 2% inflation target, I dont think the Fed would be overly concerned about a 4% annual wage growth if CPI and PCE remain on their downward trend and inflation expectations remain firmly anchored. The Household Survey showed that the unemployment rate was unchanged at 3.7% and the number of unemployed people was little changed at 6.1 mn. Lastly, the labour force participation rate was also unchanged at 62.5%. Easing of supply chains and increase in labour supply has been the central reason for disinflationary trends and any reversal down in the participation rate causes the Fed to take stern note.   

5th Jan 2024

Key takeaway: The BLS report for December indicated that non farm payrolls increased by a substantial 216K and the unemployment rate remained steady at 3.7%. After a few months of soft jobs prints, we once again received an upside surprise on jobs – and by a large margin! Bond yields spiked immediately with the 10 year spiking more than 10 basis points to 4.1%. Yields eventually traced back some of the rise but generally this is a market that is pricing in a continued tightening in labour markets and any upside surprise has a lop sided effect on yields. Average monthly jobs for 2023 have now been 225K compared to 399K in 2022. Also key to note that both October and November jobs data were revised down by a cumulative 71K. Lastly, and perhaps most importantly, average hourly earnings grew 4.1% y-o-y – higher than the 3.9% expected by economists. The Fed is bound to take note of this wage increase data. However, while this number is still above the 2.5% to 3.0% that the Fed thinks is consistent with a 2% inflation target, I dont think the Fed would be overly concerned about a 4% annual wage growth if CPI and PCE remain on their downward trend and inflation expectations remain firmly anchored. The unemployment rate, indicated by the Household Survey, was unchanged at 3.7%. However, the most important and concerning point in the Household Survey was the drop in participation rate by a large 0.3% to 62.5%. Easing of supply chains and increase in labour supply has been the central reason for disinflationary trends and any reversal causes the Fed to take stern note.   

8th Dec 2023

Key takeaway: The BLS reports on job creation in the US continue to show a moderation but yet remain firmly in solid territory. At least this particular data point is still not indicative of a current or upcoming recession. The NFP print for November showed total non farm payroll increased by 199K in November against a consensus expectation of 180K. While this number is lower than the average of 240K jobs created every month over the past 12 months, it is still a decently high number and reflects a solid job market. A large portion of the jobs increase continues to be attributable to the healthcare sector (77K jobs added in November). It is key to note that the total employment level in the US Healthcare industry now stands at a level higher (17.2mn) compared to even the pre-pandemic level (16.4mn), according to the Establishment Survey data. The other key point to note was that Leisure and Hospitality continued to add jobs as well (unlike the data seen in the latest ADP employment report). The Household Survey also surprised markets positively with the unemployment rate unexpectedly dropping from 3.9% to 3.7%. Total number of unemployed persons dropped from 6.5mn to 6.3mn. On a separate note in the context of a Fed which is equally focused on social goals, it was slightly key to bear in mind that the Asian American unemployment rate showed a sharp spike from 3.1% to 3.5%. Though African American unemployment rate was little changed at 5.8%. The last key point to note was that Average hourly earnings rose by a sharper than expected 0.4% in November. This makes the y-o-y growth in hourly earnings 4.0%. While this number is still about the 2.5% to 3.0% that the Fed thinks is consistent with a 2% inflation target, I dont think the Fed would be overly concerned about a 4% annual wage growth if CPI and PCE remain on their downward trend and inflation expectations remain firmly anchored.    

3rd Nov 2023

Key takeaway: After the previous month’s blockbuster jobs number, the NFP print for October was a modest one. Total non farm payroll increased by 150K in October against a consensus expectation of 180K. However, it would be prudent to not attribute significant importance to this weak jobs print. The weaker print can be partly attributed to employment in manufacturing decreasing substantially by 35K mostly reflecting a decline in motor vehicles and parts due to the recent strike activity. From the perspective of the Household Survey data, there wasn’t much of a change in either the unemployment rate of 3.9% or the number of unemployed persons at 6.5mn. The other key point to note was that August jobs were revised down by 62K and September was revised down by 39K. With these revisions, cumulatively job creation in August and September was lower by a sizeable 101K. Average hourly earnings rose a modest 0.2%. This was slightly lower than expectations and hence viewed favourably by market participants. Finally the last key point to note in the October jobs print was a small drop in the labour force participation rate from 62.8 to 62.7. While the drop was not large, it was the first reduction in over a year.   

6th Oct 2023

Key takeaway: After few months of modest NFP prints, we are back in familiar territory. Total non farm payroll increased by a whopping 336K in September. This was much higher than consensus estimates of around 170K. The hot NFP report also comes on the back of an equally hot JOLTS report a few days back. In an environment where long bond yields are burning higher, it adds further fuel to the fire. Employment continued to trend up in the leisure, hospitality and healthcare. Similar to last month, average hourly earnings increased a modest 0.2%. Increasing job growth with modest wage gains supports the soft landing narrative. The further icing on the cake was that past 2 months of job numbers were also revised substantially upward. The unemployment rate held at 3.8% and so did the labor force participation rate at 62.8%.  

1st Sep 2023

Key takeaway: Total non farm payroll increased by 187K in August. The print was just above the consensus estimate of approx. 170K. And that fell right in the sweet spot of market expectations – softer than the previous super charged readings of 250K plus which had been the feature of most of the past year, but yet not low enough to spook the market on recession fears. Employment continued to trend up in the leisure, hospitality and healthcare sectors – although the pace of increase has declined. Average hourly earnings increased 0.2% over the month and 4.3% over the year. This key number was also more or less in line with expectations and the market was relieved by that. The average work week also crept up marginally to 34.4 from 34.3 which caused average weekly earnings to rise. However, despite all these numbers, the key point to note in the Establishment Survey was the revision downward in the previous months’ jobs data. June was revised down by 80K – from 185K to 105K. Similarly July was revised down from 187K to 157K. With substantial revisions in the jobs data for the year, some market participants are beginning to doubt the actual strength of the tight labour market. Lastly, the Household Survey showed the unemployment rate rose substantially from 3.5% last month to 3.8% in August. The increase was mostly attributable to the rise in labour participation rate from 62.6% in July to 62.8% in August.  

4th Aug 2023

Key takeaway: After a massive upside surprise in ADP employment data the day before (just like the previous month of June), market participants were keenly watching NFP today to see if it would surprise to the upside as well. However, NFP came in lower than consensus expectations in July (187K vs 200K expected). Once again, similar to the previous month, jobs data for the previous 2 months was also revised down. However, even a 187K clip is a strong enough print which keeps the labor market situation tight. More importantly, average hourly earnings grew 0.4% m-o-m and 4.4% y-o-y. Both numbers were higher than consensus expectations. That is also indicative of continuing wage pressures. Lastly, average workweek for all employees on private non farm payrolls decreased slightly to 34.3 from 34.4 the previous month. This can generally indicate a broader slowdown in the economy as well. On the Household Survey, unemployment rate remained basically unchanged.  

7th Jul 2023

Key takeaway: After a massive upside surprise in ADP employment data the day before, market participants were keenly watching NFP to see if it would surprise to the upside as well. However, NFP came in much lower than consensus expectations in June (209K vs 225K expected). Jobs data for the past 2 months was also revised down by 110K. However, even with this lower print, the average monthly job creation in 1H 2023 has been a significant 278K. According to the Household survey, the unemployment rate remained relatively unchanged in Jun at 3.6%. However, it was key to note that U-6 (which is total unemployed including people employed part time for economic reasons) inched up higher from 6.7% to 6.9%. Lastly average hourly earnings growth remained still elevated at 0.4% over the previous month (annualized approx. 5%). In summary, the labour market still remains much too tight and annual wage gains much too high for the Fed’s comfort.  

2nd Jun 2023

Key takeaway: This US labour market probably has no parallel in US economic history. Month after month, everyone – including policy makers and market participants – keep expecting the labour market to wilt in the face of tighter monetary policy. And the labor market stands firm in response. The May NFP release showed that the US economy added a massive 339K jobs. Consensus expectations were a more sober 180K. The report also showed the last 2 months data being revised to add another 93K. Other positive indications coming out of this report included the softer than expected rise in average hourly earnings (0.3% vs 0.4% expected) and no drop in participation rate (remained at 62.6%). However, a feature which was common through many months of 2022 also returned back in May 2023 – the discrepancy in the job market presented by the Household Survey vs the Establishment Survey. The Household survey showed unemployment rate up by 0.3% to 3.7% in May. The number of unemployed persons increased by 440K! Usually the Household Survey tends to be more volatile than the Establishment survey – which is more comprehensive with a larger sample size. However, the market believes that the Fed is likely to ignore the large May NFP print (and the hot JOLTS print) and take a pause in the upcoming June meeting. 

5th May 2023

Key takeaway: The April payroll report headline was a significant payroll gain of 253K, exceeding consensus expectations. However, there were other details that were equally important to note. Firstly, Feb and Mar job numbers were revised down by a combined 149K. Thats a substantial revision down! The job gains continued to be dominated by leisure and hospitality (31K) and healthcase (40K). Employment was little changed in major industries like construction, manufacturing, wholesale trade, transportation, etc. In other words, job gains were not broad-based. The dichotomy between the Establishment Survey and the Household Survey also continued. Employment, as per the Household Survey, increased only ~130K. The Unemployment Rate though, still held at a record low of 3.4%. It also did not help that the participation rate remained unchanged at 62.6%. Average hourly earnings increased 4.4% y-o-y. This key number was higher than consensus expectations of 4.2% – which indicates continuing wage pressures. The Fed will certainly be taking note of this number. Even more so, given the recently released hotter-than-expected Employment Cost Index for Q1 2023.  

7th Apr 2023

Key takeaway: The March payroll report, once again, was important. January and February had both been blowout jobs numbers. Hence, market participants were keen to observe if the strong jobs trend would continue. The March jobs number, while in line with expectations, was substantially lower (236K) than Jan and Feb – indicating a moderating job market. JOLTs data released earlier in the week also showed a reduction in job openings from 10.5mn to 9.9mn (Feb 2023). There were also some other key points to takeaway from this report. Firstly, private sector payrolls have been reducing substantially – even over the past 3 months (353K Jan to 266K Feb to 189K Mar). Most of the job gains were in Leisure and Hospitality, Healthcare and Government sectors – indicating that the job gains are not broadbased. Average hourly earnings grew at 0.3% m-o-m or 4.2% y-o-y. The Fed wants to see this number come down below 4%. Average workweek for all employees also edged down by 0.1 hour to 34.4 hours in March. Lastly, one of the key positives from the report was the tick up in participation rate (although still below pre-pandemic rate of 63.4). Overall, the report was neutral on all counts – on the balance though, indicating a slowdown.  

10th Mar 2023

Key takeaway: A ton of market participants were looking forward to the Feb payroll number to also gauge if the blowout 517K number in Jan was a one off event driven by seasonal factors. That turned out to be a false hope. Feb payroll was not as high as Jan – but still beat expectations by quite a margin. 311K vs expectations of 205K. Also, the revision downward on the Jan number was not substantial. While the headline jobs number was still large, the other indicators in the NFP report pointed towards a slowing labour market. Unemployment rate inched up from 3.4% to 3.6%. The average hourly earnings rate increased 0.2% m-o-m vs 0.3% expected. Lastly average weekly hours worked also fell from 34.6 to 34.5. However, overall there weren’t many positives to draw from this report from a disinflationary perspective and taken together with the 10.8mn latest JOLTS numbers, this will keep the pressure on the Fed to tighten further at the upcoming meetings (financial stability risks notwithstanding!). 

3rd Feb 2023

Key takeaway: An absolute stunner! No better way to describe this. What’s even more amazing is the markets’ reaction to the jobs data. Despite the fact that this puts some doubt into the terminal FF rate destination, equity markets are continuing the jubilant mood of January and have retraced the 1% loss (S&P500) by mid day. 517K jobs is a blowout number by any standards! What else do we need to know about the report. The November and December jobs data was revised upwards by a cumulative 72K as well. The unemployment rate fell to a 40 year low of 3.4%! Participation rate ticked up marginally to 62.4% from 62.3. Average hourly earnings (the number that really sparked this January mega rally in risk assets) came in as expected at 0.3% but were slightly higher (4.4%) compared to consensus (4.3%) on a y-o-y basis. Moreover the December number was revised upwards from 0.3% to 0.4%! The average work week increased a substantial quantum from 34.4 to 34.7. This massive jobs number together with the increase (again) of JOLTs data really puts a lot of pressure on the Feb CPI data release. Any hint of inflation rising or even remaining sticky in the next couple of inflation reports will spin the rates market on its head! 

6th Jan 2023

Key takeaway: This was no doubt a blockbuster jobs report. Headline Payrolls rose 233K when expectations were approx. 200K. And that brings the total jobs created in 2022 to 4.5 million ! Top that up with the fact that the unemployment rate fell back down to 3.5% from 3.7%. Lastly, the usual dichotomy observed between the Establishment Survey and the Household Survey was absent as well. Total employed persons, per the Household Survey, also increased from 158.5mn to 159.2mn. But the most important datapoint in the latest jobs report that the market chose so heavily to focus on was average hourly earnings – which rose 0.3% m-o-m against expectations of 0.4%. That translates to 4.6% annual increase in hourly earnings – not very far from the 3-4% level that the Fed might be comfortable with as it vigorously pursues its goal of preventing a wage price spiral. However, as Larry Summers has nicely explained here, the m-o-m data tends to be a little volatile and it might be more preferable to examine the Employment Cost Index data for Q4 2022 that will come out later in the month. Separately, even though it seems like a small change, it is key to note that the average weekly hours has fallen 2 months in a row. 

2nd Dec 2022

Key takeaway: The juggernaut that is the US labour market continued its show of strength in November as well. Headline job creation at 263K was a screaming beat against consensus expectations for 200K! The average job creation in 2022 thus far has been 392K per month. But the most important number in today’s release was not headline job creation. It was average hourly earnings. Which increased 0.6% m-o-m and 5.1% y-o-y. Like I have mentioned before, its really is wage inflation that the Fed is most concerned about! However, on the other hand, the dichotomy between the Establishment Survey and the Household Survey also continued in November. While the Establishment Survey shows 263K jobs added, the number of employed people as per the Household Survey barely changed. In fact it has barely changed since the last 8 months! This is a critical point and often gets obscured by the more widely followed non-farm payroll headline number. Lastly, labour force participation remains dismal at 62.1%. It has become very evident from recent Powell speeches that the Fed has given up hope on the participation rate moving higher. Put differently, if supply of labour is unlikely to increase, the Fed has to double down on quashing demand. 

4th Nov 2022

Key takeaway: The headline job creation number at 261K was a screaming beat! The average job creation in 2022 has been north of 350K per month when roughly on average 50K of adults get added to the workforce every month. That helps put into context the 2 to 1 jobs to unemployed ratio that we have seen for most of the year. However, there were also some other points to note in the October BLS release. While the Establishment Survey pointed to net job gains of 261K, the number of unemployed actually grew by 306K compared to September according to the Household Survey. In fact the total employed population over the age of 16 at 158.6mn has not changed at all since March 22. This is a critical point and often gets obscured by the more widely followed non-farm payroll headline number. The markets also seemed to like that fact that y-o-y growth in average hourly earnings fell below 5% since December 2021. However, on a m-o-m basis, average hourly earnings picked up pace growing at 0.4% in October compared to 0.3% in September. Moreover labour force participation ticked lower to 62.3% – continuing to pour cold water on Chair Powell’s hopes of workers returning to the labour force. Overall, the report had more points to be worried about than the other way round!

7th Oct 2022

Key takeaway: Even though September job creation was one of the lowest numbers in the recent months, it was still way to high to give even a small hint of labor market loosening. No wonder the Dow fell 600 points as investors further realize that the Fed will grow more resolute in tightening. Every other detail in the NFP report was a similar tune as well. Participation rate did not increase. Average workweek remained the same. Average hourly earnings were still elevated at 0.3% m-o-m. The Household survey had shown a large increase in the number of unemployed persons in August which had suggested some possibility of layoffs. But this number was back down in this month’s survey.    

2nd Sep 2022

Key takeaway: There were a number of key points to note in the August jobs report. Firstly, NFP grew 315K in August. Expectations were approx. 300K. So right in line. The advantage of a number like this – unlike the last 2 months – is that its is high enough to indicate a strong economy but not high enough to make the Fed worry about further overheating in the jobs market. The other big point was Participation Rate, which ticked up meaningfully 62.1 to 62.4. Still a whole percentage point below pre-covid levels, but almost a percentage point about mid 2021 levels! This is one of the main pillars that Chair Powell is banking on to counter wage inflation pressures. On the downside, the number of unemployed persons grew by a large number 344K, in the Household Survey. While unemployment claims have steadily increased, they have not yet started indicating meaningful signs of a job recession. Hence, a large increased in the number of unemployed persons in the Household survey is key to note.    

5th Aug 2022

Key takeaway: Rip-roaring, Electrifying, Mind-boggling, Hair-raising…. I fall short of adjectives to describe the July jobs number! 528K instead of an expected 250K! More than 2x! Another point to note – June was revised upwards from 372K to 398K as well. In simple words, this just makes the Fed’s job that much harder and puts a 75 basis points hike back on the table for the September meeting. However, it also truly lends some credence to “the soft landing” theory and shows a still resilient economy. Need to watch revisions to this number in the coming months as well.   

8th Jul 2022

Key takeaway: This is still a cracker of a number! Frankly speaking, a slightly lower number may have been positive for equity markets. Instead, the number reinforces a solid labour market and will strengthen Fed’s resolve to keep at it on the rates front. No wonder treasury yields are up sharply and the 10 year once again above 3%. Similarly, it is also key to note that the anaemic participation rate shows no signs of improvement. Put that together with the Fed meeting minutes which showed that the FOMC members have pretty much given up on the participation rate going up.  

3rd Jun 2022

Key takeaway: Even in the previous month of April, jobs creation outperformed consensus estimates and the equity markets dropped in reaction. Today was no different. In another macro backdrop, outperforming jobs gains would have been positive for the equity markets – not right now! 390K jobs added in May compared to estimates of 318K.

There were a few other points to note. Average hourly earnings growth remained steady at 0.3% mom. In other words, a positive that it did not increase! Participation rate edged up to 62.3%. A modest increase but an increase nonetheless. The Fed has squarely wage inflation signs on its tracker lens and the only way to beat it without killing the economy off is by increasing the labour supply. Lastly, employment in Retail Trade sector fell notably by 61K. This shows job losses in general merchandise stores, clothing stores, food, beverage, healthcare stores, etc. 

6th May 2022

Key takeaway: You can be excused if you simply ignored the April NFP report and just referred to the March report instead. You would not have missed much! For anyone looking for a silver lining in the April NFP data – there simply was none! Unemployment rate remains low, job creation remains high, average hourly earnings still increasing at a pretty high rate causing genuine labour inflation concerns, people still missing from the active workforce evidenced by a low participation rate. And this disappointment reflected in the equity markets on Friday. It is amazing that in an all-together different macro environment, 430K jobs added would have been a positive development. Not in this one! 

1st Apr 2022

Key takeaway: Logjam at ports? Lockdowns in Shanghai? Now the Fed cant do anything about that. But, wages increasing 5.6% yoy? The Fed can tamp that down… and it will! Payrolls increased 431,000 in March. A bit less than expected, but large enough to grease the wheels of a 50 basis points May hike. Also, and very importantly, there wasn’t a material enough increase in labour force participation. The challenging hunt for labour for businesses and the upward pressure on wages continues unabated. 

4th Mar 2022

Key takeaway: 678,000! Thats big! Reinforces the view that the labor market is strong. However, importantly, average hourly earnings were little changed from last month. Its is key to see how wage gains move from here on. Remember – on an inflation adjusted basis, wages are falling and so will consumer spending if this trend continues. Overall, the report strengthens the case for tightening monetary policy.

4th Feb 2022

Key takeaway: Labor momentum is definitely strong. Bolsters the case for March rate hike. But keep an eye on the average hours worked. Average hours worked trending down is a deflationary signal

  • Added 467,000 jobs in January, beating estimates of 125,000
  • Unemployment rate increased marginally from 3.9% to 4%
  • US Participation rate increased marginally to 62.2% from 61.9% in December 2021
  • Average hourly earnings increased 5.7% over last 12 months
  • Average workweek for all employees on US private nonfarm payrolls fell by 0.2 hour to 34.5 hours in January of 2022, the lowest since April of 2020, compared with market expectations of 34.7 hours

US Bureau of Labor Statistics