Join research director Kathleen Brooks NOW as she follows the US Non Farm Payrolls report live. The financial markets are jittery as we lead up to this payrolls report.
Growth fears have been on investors’ minds in recent months, after a spate of weaker than expected economic data. This has led to a sharp decline in the Citi economic surprise index, as you can see below. There are signs that a slowdown in the economy is starting to impact the labour market. The employment component of the ISM manufacturing survey is deep in contraction territory. Private sector payrolls expanded at their lowest level since March 2023, and initial jobless claims are also at an 8-month high.
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Create account Try a demo Download mobile app Download mobile appThe US economy needs to create approximately 200k jobs per month for the unemployment rate to remain stable, likewise, initial jobless claims need to stay below 260k-270k per week for the unemployment rate not to rise. The question is, will job growth slow to such an extent that the unemployment rate rises? The consensus is no, not yet. It is worth considering the economic backdrop, to determine if a downside surprise in the labour market data could materialise on Friday. Consumer sentiment has picked up in recent weeks, although it remains at low levels, business confidence has also picked up from the lows, and the layoff rate, as calculated by the Jolts survey, remains stable.
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