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US NFP Data and Focus on AHE Reason Inflation

March 31, 2016 7:57 pm

We are predicting that non-farm payrolls may be increased in the month of March 2016, the current condition of private service payrolls is on average level and also Jobless Claims data solid, initial claims at lows level, ISM non-manufacturing index declined from to 53.4 to 49.7. We are measured the employment by the following model and leading indicators of labour market:

  • PMI employment suggests stable employment growth of around 200,000
  • Initial jobless claims model suggests slower job growth
  • Small business hiring plans next three months
  • Worker confidence and unemployment rate
  • Unemployment rate at NAIRU
  • Unemployment decomposed by duration
  • Long-term unemployment rate higher than average
  • Short-term unemployment rate very low
  • Long-term unemployment as % of total unemployed
  • Distribution of duration of unemployment
  • Marginally attached workers still a bit above average
  • U6 unemployment rate vs U3 unemployment rate
  • Part-time employed for economic reasons
  • Employment to population ratio
  • NFIB compensation plans
  • Hourly earnings, production and non-supervisory
  • Unit labour costs is putting upward pressure on core inflation
  • Worker confidence is slowly rising – will wages follow?
  • Unemployment and time to fill vacancies
  • Short-term unemployment and time to fill vacancies
  • The rate of new job openings and hire rate (3M moving average)

After analyzing the leading indicators of employment, we are expected that the Non-Farm Payroll data better than expected as per forecast.

Keep in mind that Federal Reserve focused on inflation so the Average Hourly Earning have high importance than NFP data. So our focus on Average Hourly Earning, as per sub components of inflation we measured that the Average Hourly Earning positive, so at the time of event dollar index move upward strongly. Enjoy the sell trade in eurusd, gbpusd and gold etc accordingly.

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