The last signal before the Fed meeting
Given the different surprises in recent days in the economic calendar, we can not have an exact analysis of tomorrow's non-farm payroll numbers. However, based on published data so far, we can not expect an upward surprise.
With Thursday's published initial Jobless claims numbers, the 4-week moving average of initial unemployment claims has ticked up. With 225K apply to unemployment benefits in the week ended November 25, we have 228.75K as Jobless Claims 4-Week Average. The Continuing Jobless Claims also publish with one week delay, increased to 1,608K, up from 1,551K.
On Wednesday also had ADP and Jolts reports. According to Automatic Data Processing (ADP), the monthly change in non-farm, private employment, based on the payroll data of approximately 400,000 US business clients, just 127K net new jobs were created in November, the lowest reading since January 2021. . And based on Bureau of Labor Statistics report, not filed positions on the last business day of October were 10.334M, which is under 11 million and 10.687M of the month earlier.
Data show an outright drop of -86K jobs in Manufacturing sectors, suggesting that manufacturing activity is slowing ahead of the holiday season. November nonfarm payroll data will release on Friday, December second. Market participants expect 200K newly created jobs with a 0.3% Average Hourly Earnings. The unemployment rate also expected to stay unchanged at 3.7%
Better than expected numbers will support the less hawkish policies idea, which is positive for the US dollar and negative for the stock markets. On the other hand, a weaker number will reinforce the idea that the pace of interest rate hikes should be slowed down a bit. Less hawkish policies, which were seen in the last speech of Fed chair Powell as well, can increase the pressure on the US dollar and increase stock prices.