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Market News Non-agricultural outlook in October: The epidemic is alleviated + the economy improves, and the non-agricultural population will increase dramatically!
Non-agricultural outlook in October: The epidemic is alleviated + the economy improves, and the non-agricultural population will increase dramatically!
GMT+8 At 20:30 on November 5th, the U.S. Department of Labor will announce the October non-agricultural employment report. As the new wave of the epidemic eases and the economy improves, the number of new additions in this non-agricultural report is expected to rebound sharply. The current forecasts of 25 investment banks show that non-agricultural increase of 474,000 in October, the unemployment rate is 6.79%, and the average salary increase is 4.92%. Data may be negative for gold, and investors need to be psychologically prepared.
2021-11-05
8620
GMT+8 At 20:30 on November 5th, the U.S. Department of Labor will announce the October non-agricultural employment report. After two consecutive months of upset non-agricultural data, the number of new additions in this non-agricultural report is expected to rebound sharply. Although the Fed announced in its last resolution to reduce debt purchases, it is still silent about raising interest rates. However, what is certain is that the Fed needs to wait until "full employment" before it starts raising interest rates. This process is closely related to the performance of the non-agricultural report.
The current forecasts of 25 investment banks show that non-agricultural increase of 474,000 in October, the unemployment rate is 6.79%, and the average salary increase is 4.92%. Data may be negative for gold, and investors need to be psychologically prepared.
According to data released by the US Bureau of Labor Statistics, the non-agricultural employment population in the United States in September increased by 194,000 after a seasonal adjustment, and is expected to increase by 500,000. The previous value increased by 235,000. The unemployment rate in September fell to 4.8%, a continued record since March 2020. The new low is expected to be 5.1%, and the previous value is 5.2%. The average hourly wage rate in September is 4.6%, which is expected to be 4.6%, and the previous value is 4.3%.
The non-agricultural employment population in the United States increased by only 194,000 in September, which is even worse than in August. It is far less than the market’s previous expectations of an increase of 500,000. At the same time, the unemployment rate has hit a new low since the outbreak. 4.8%. The data shows that the lack of employment willingness of the American people has led to sluggish employment growth that has not been reversed, although most federal unemployment subsidies have ended that month. As a result, on the one hand, employment growth has been slow, and on the other hand, labor shortages have further increased the level of wage inflation. This situation is also bound to put the Fed's subsequent policy orientation into a more dilemma.
The growth rate of non-agricultural employment in the United States further slowed down in September and the unemployment rate continued to fall. The reason is that the employment participation rate of the whole society has further declined. Many low-paid, difficult jobs that require outdoor field work or close contact with customers are still difficult It's hard to fill.
Bloomberg analyst Olivia Rockman commented on Non-Farmers in September that the sluggish employment growth for several months shows that a tug-of-war is being staged between employers and job seekers-employers urgently need employees to meet demand. But job seekers have been reluctant to return to the workplace. Nevertheless, as companies raise wages, the reopening of schools and the end of federal unemployment benefits should lead to an increase in hiring in the coming months.
As the new wave of epidemic subsides and the economy improves, recruitment is expected to increase steadily, and wages may continue to rise in October.
According to Dow Jones data, economists expect an increase of 450,000 jobs last month, and the unemployment rate is expected to fall from 4.8% to 4.7%. Hourly wages in October are expected to increase by 0.4%, a year-on-year increase of 4.9%. This is higher than the growth rate of approximately 4.6% in September.
After the Fed meeting this week, economists paid close attention to the wage section of the report, which has been rising for months. The Fed said on Wednesday that it continues to believe that inflation is temporary. Economists said that if inflation continues to heat up or become higher, the Fed may quickly take action to raise interest rates. The futures market is digesting expectations of the Fed's first rate hike in July.
Diane Swonk, chief economist at Grant Thornton, predicts that the number of jobs in October will reach 650,000 , much higher than generally expected. She said that not only inflation and wages may become an issue for the Fed, but months of continued strong employment data may change the Fed's prospects.
"By December, they will have two more months of employment data. If we have another two months of strong employment reports, I would not be surprised that the Fed will accelerate its contraction in December or January, " she said.
FXStreet analyst Joseph Trevisani said that the problems in the US labor market clearly do not come from employers. With millions of vacancies, the company desperately needs workers.
He believes that rampant consumer inflation may encourage many workers to return to work.
“When gasoline rises by nearly 50% in a year and food costs rise every month, a stable job may be seen as far more reliable than government generosity,” he said.
Forecasts of 25 large investment banks show that major investment banks believe that after the unexpected downturn in September, the non-agricultural employment population will increase sharply in October, but the expected growth gap between investment banks is large. Specifically, after the October seasonal adjustment in the United States, the growth rate of non-agricultural employment population is expected to be between 350,000 and 675,000, the unemployment rate is expected to be between 6.7% and 7%, and the annual average hourly wage growth rate is expected to be between 4.7% and 5%.
The October non-agricultural report failed to affect the Fed’s decision this week, but it will still affect the Fed’s future interest rate hikes. If the non-agricultural employment data in October is stronger than expected, it may make the Fed reach the conditions for raising interest rates sooner, which will benefit the US dollar index.
[U.S. manufacturing growth slowed in October, employment indicators rose to a three-month high]
In October, US manufacturing companies continued to be under pressure due to supply chain issues, supplier delivery times were extended, and inventory indicators increased.
According to data released on Monday, the Institute of Supply Management (ISM) manufacturing index fell to 60.8 from 61.1 in September. A reading above 50 indicates expansion. Economists surveyed expected a median value of 60.5.
ISM’s supplier delivery index rose to a five-month high, indicating that manufacturers are facing longer delivery times for raw materials. Labor shortages, intermittent shutdowns and record imports of goods overwhelmed US ports and delayed deliveries. This also led to a sharp rise in inventory indicators, reaching the highest level since 1984.
Timothy Fiore, chairman of the ISM Manufacturing Survey Committee, said, "In the face of increasing demand, the challenges that companies and suppliers need to overcome have reached unprecedented levels."
Fiore said: “All areas of the manufacturing industry are affected by record delivery cycles of raw materials, continued shortages of key materials, rising commodity prices and difficulties in product transportation.”
Manufacturers appear to have had some success in increasing manpower, with employment indicators rising to a three-month high of 52.
[U.S. service industry PMI rose to a record high in October, but employment indicators fell to a four-month low]
The expansion of service providers in the United States reached a record level in October, boosted by strong demand and increased business activities.
Data released on Wednesday showed that the Institute of Supply Management (ISM) service industry index rose to 66.7 from 61.9 in September, exceeding all economists’ expectations.
New orders and business activity indicators have also risen to the highest levels since statistics were available in 1997, indicating that as the new crown epidemic eased, the economy further accumulated momentum in the beginning of the fourth quarter.
Anthony Nieves, chairman of the ISM Service Industry Investigation Committee, issued a statement saying: "Demand shows no signs of slowing down, however, ongoing challenges (including supply chain disruptions and labor and material shortages) are limiting production capacity and affecting overall business conditions."
At the same time, the decline in employment indicators shows that labor market challenges still exist. The indicator fell to a four-month low of 51.6 in October, indicating that although demand remains strong, employment growth is more modest.
According to data from the ADP Research Institute, private sector employment increased by 571,000 in October, higher than expected, but employment levels are still much lower than before the outbreak.
[ADP data shows that the number of new jobs created by American companies exceeds expectations]
The number of new jobs created by American companies is the highest in four months, indicating that employers are making progress in filling near-record job vacancies.
According to data released by the ADP Research Institute on Wednesday , corporate employment increased by 571,000 in October, which was revised to an increase of 523,000 in September . Economists surveyed expected a median increase of 400,000.
As labor shortages continue to plague production and push up prices, companies urgently need to hire employees. Despite this, the total number of employed persons in ADP data is still far below pre-pandemic levels, indicating that higher wages and signing bonuses are not enough to attract and retain talent in a labor market where job seekers are increasingly picky.
The Ministry of Labor will release its monthly employment report on Friday, and it is expected that non-agricultural employment will increase by 408,000 in October. Although ADP data does not always follow the same pattern as the Department of Labor data, this acceleration may indicate a strong non-agricultural employment report in October.
[The number of challenger layoffs in the United States has increased in October]
The number of layoffs by challenger companies in the United States in October rose to 22,800 from 17,900 in September.
The president of Employment Data Challenger said the United States is still in a labor market where demand far exceeds supply.
The U.S. Occupational Safety and Health Administration will issue a federal vaccine order, which already exists for many government employees and contractors and healthcare providers. This complicates recruitment and retention.
[Number of initial jobless claims hit a new low since the epidemic]
The number of initial jobless claims in the United States fell to the lowest level in nearly 20 months last week, suggesting that the economy is regaining momentum as the public health situation improves significantly, although supplies remain tight.
Data released by the US Department of Labor on Thursday showed that as of the week of October 30, the number of people applying for unemployment benefits for the first time in the United States was 269,000. The previous value was 283,000 (corrected from 291,000), which was better than the 277,000 expected by the market .
The number of initial jobless claims has fallen from a record high of 6.149 million in early April 2020, and is currently within the range that is generally believed to be in line with a healthy labor market .
As of the week of October 23, the number of continued jobless claims fell by 134,000 to 2.105 million. This is also the lowest level since mid-March 2020. Since the government-funded relief fund expired in early September, the number of people receiving assistance has fallen by about 75%.
The decline in initial jobless claims bodes well for the October employment report scheduled to be released on Friday. According to a Reuters survey of economists, non-agricultural jobs are expected to increase by 450,000.
Wells Fargo: Non-agricultural employment is expected to increase by 390,000 in October
The US ISM non-manufacturing PMI data released on Wednesday hit a record high. Economic activity has never been so rapid, demand shows no signs of slowing down, and prices show no signs of falling. The main challenge facing the recovery of the labor market remains the problem of labor supply. In the past month, the factors that hindered workers from finding jobs have not disappeared, but as the number of people who do not seek jobs due to fear of the new crown epidemic and caring for children has decreased, many influencing factors have eased. Recently, in the case of a sharp increase in wages, the expiration of the additional unemployment benefit program should encourage workers to return to the labor market. Therefore, we expect non-agricultural employment to increase by 390,000 in October.
Bank of America: Non-agricultural materials increased by 450,000 in October;
① Bank of America expects to add 450,000 jobs in October, and predicts that the pace of recruitment will maintain a relatively high speed for a period of time, because growth is expected to improve;
②Alex Lin, an American economist at Bank of America, said: “We believe that a major limiting factor that has caused the slowdown in the job market in recent months is related to the new crown epidemic, and now it seems that the number of cases and hospitalizations is moving towards the right Direction development."
③Lin predicts: "Restaurants, hotels, and retailers will become areas where workers will be increased by a large amount. We generally expect that wage growth will be stronger in the future."
The current forecasts of 25 investment banks show that non-agricultural increase of 474,000 in October, the unemployment rate is 6.79%, and the average salary increase is 4.92%. Data may be negative for gold, and investors need to be psychologically prepared.
September non-agricultural review
According to data released by the US Bureau of Labor Statistics, the non-agricultural employment population in the United States in September increased by 194,000 after a seasonal adjustment, and is expected to increase by 500,000. The previous value increased by 235,000. The unemployment rate in September fell to 4.8%, a continued record since March 2020. The new low is expected to be 5.1%, and the previous value is 5.2%. The average hourly wage rate in September is 4.6%, which is expected to be 4.6%, and the previous value is 4.3%.
The non-agricultural employment population in the United States increased by only 194,000 in September, which is even worse than in August. It is far less than the market’s previous expectations of an increase of 500,000. At the same time, the unemployment rate has hit a new low since the outbreak. 4.8%. The data shows that the lack of employment willingness of the American people has led to sluggish employment growth that has not been reversed, although most federal unemployment subsidies have ended that month. As a result, on the one hand, employment growth has been slow, and on the other hand, labor shortages have further increased the level of wage inflation. This situation is also bound to put the Fed's subsequent policy orientation into a more dilemma.
The growth rate of non-agricultural employment in the United States further slowed down in September and the unemployment rate continued to fall. The reason is that the employment participation rate of the whole society has further declined. Many low-paid, difficult jobs that require outdoor field work or close contact with customers are still difficult It's hard to fill.
Bloomberg analyst Olivia Rockman commented on Non-Farmers in September that the sluggish employment growth for several months shows that a tug-of-war is being staged between employers and job seekers-employers urgently need employees to meet demand. But job seekers have been reluctant to return to the workplace. Nevertheless, as companies raise wages, the reopening of schools and the end of federal unemployment benefits should lead to an increase in hiring in the coming months.
Non-agricultural employment will rebound in October
As the new wave of epidemic subsides and the economy improves, recruitment is expected to increase steadily, and wages may continue to rise in October.
According to Dow Jones data, economists expect an increase of 450,000 jobs last month, and the unemployment rate is expected to fall from 4.8% to 4.7%. Hourly wages in October are expected to increase by 0.4%, a year-on-year increase of 4.9%. This is higher than the growth rate of approximately 4.6% in September.
After the Fed meeting this week, economists paid close attention to the wage section of the report, which has been rising for months. The Fed said on Wednesday that it continues to believe that inflation is temporary. Economists said that if inflation continues to heat up or become higher, the Fed may quickly take action to raise interest rates. The futures market is digesting expectations of the Fed's first rate hike in July.
Diane Swonk, chief economist at Grant Thornton, predicts that the number of jobs in October will reach 650,000 , much higher than generally expected. She said that not only inflation and wages may become an issue for the Fed, but months of continued strong employment data may change the Fed's prospects.
"By December, they will have two more months of employment data. If we have another two months of strong employment reports, I would not be surprised that the Fed will accelerate its contraction in December or January, " she said.
FXStreet analyst Joseph Trevisani said that the problems in the US labor market clearly do not come from employers. With millions of vacancies, the company desperately needs workers.
He believes that rampant consumer inflation may encourage many workers to return to work.
“When gasoline rises by nearly 50% in a year and food costs rise every month, a stable job may be seen as far more reliable than government generosity,” he said.
Prospects of 25 investment banks: U.S. non-agricultural materials rebounded in October
Forecasts of 25 large investment banks show that major investment banks believe that after the unexpected downturn in September, the non-agricultural employment population will increase sharply in October, but the expected growth gap between investment banks is large. Specifically, after the October seasonal adjustment in the United States, the growth rate of non-agricultural employment population is expected to be between 350,000 and 675,000, the unemployment rate is expected to be between 6.7% and 7%, and the annual average hourly wage growth rate is expected to be between 4.7% and 5%.
The October non-agricultural report failed to affect the Fed’s decision this week, but it will still affect the Fed’s future interest rate hikes. If the non-agricultural employment data in October is stronger than expected, it may make the Fed reach the conditions for raising interest rates sooner, which will benefit the US dollar index.
Several forward-looking indicators to look at non-agricultural
[U.S. manufacturing growth slowed in October, employment indicators rose to a three-month high]
In October, US manufacturing companies continued to be under pressure due to supply chain issues, supplier delivery times were extended, and inventory indicators increased.
According to data released on Monday, the Institute of Supply Management (ISM) manufacturing index fell to 60.8 from 61.1 in September. A reading above 50 indicates expansion. Economists surveyed expected a median value of 60.5.
ISM’s supplier delivery index rose to a five-month high, indicating that manufacturers are facing longer delivery times for raw materials. Labor shortages, intermittent shutdowns and record imports of goods overwhelmed US ports and delayed deliveries. This also led to a sharp rise in inventory indicators, reaching the highest level since 1984.
Timothy Fiore, chairman of the ISM Manufacturing Survey Committee, said, "In the face of increasing demand, the challenges that companies and suppliers need to overcome have reached unprecedented levels."
Fiore said: “All areas of the manufacturing industry are affected by record delivery cycles of raw materials, continued shortages of key materials, rising commodity prices and difficulties in product transportation.”
Manufacturers appear to have had some success in increasing manpower, with employment indicators rising to a three-month high of 52.
[U.S. service industry PMI rose to a record high in October, but employment indicators fell to a four-month low]
The expansion of service providers in the United States reached a record level in October, boosted by strong demand and increased business activities.
Data released on Wednesday showed that the Institute of Supply Management (ISM) service industry index rose to 66.7 from 61.9 in September, exceeding all economists’ expectations.
New orders and business activity indicators have also risen to the highest levels since statistics were available in 1997, indicating that as the new crown epidemic eased, the economy further accumulated momentum in the beginning of the fourth quarter.
Anthony Nieves, chairman of the ISM Service Industry Investigation Committee, issued a statement saying: "Demand shows no signs of slowing down, however, ongoing challenges (including supply chain disruptions and labor and material shortages) are limiting production capacity and affecting overall business conditions."
At the same time, the decline in employment indicators shows that labor market challenges still exist. The indicator fell to a four-month low of 51.6 in October, indicating that although demand remains strong, employment growth is more modest.
According to data from the ADP Research Institute, private sector employment increased by 571,000 in October, higher than expected, but employment levels are still much lower than before the outbreak.
[ADP data shows that the number of new jobs created by American companies exceeds expectations]
The number of new jobs created by American companies is the highest in four months, indicating that employers are making progress in filling near-record job vacancies.
According to data released by the ADP Research Institute on Wednesday , corporate employment increased by 571,000 in October, which was revised to an increase of 523,000 in September . Economists surveyed expected a median increase of 400,000.
As labor shortages continue to plague production and push up prices, companies urgently need to hire employees. Despite this, the total number of employed persons in ADP data is still far below pre-pandemic levels, indicating that higher wages and signing bonuses are not enough to attract and retain talent in a labor market where job seekers are increasingly picky.
The Ministry of Labor will release its monthly employment report on Friday, and it is expected that non-agricultural employment will increase by 408,000 in October. Although ADP data does not always follow the same pattern as the Department of Labor data, this acceleration may indicate a strong non-agricultural employment report in October.
[The number of challenger layoffs in the United States has increased in October]
The number of layoffs by challenger companies in the United States in October rose to 22,800 from 17,900 in September.
The president of Employment Data Challenger said the United States is still in a labor market where demand far exceeds supply.
The U.S. Occupational Safety and Health Administration will issue a federal vaccine order, which already exists for many government employees and contractors and healthcare providers. This complicates recruitment and retention.
[Number of initial jobless claims hit a new low since the epidemic]
The number of initial jobless claims in the United States fell to the lowest level in nearly 20 months last week, suggesting that the economy is regaining momentum as the public health situation improves significantly, although supplies remain tight.
Data released by the US Department of Labor on Thursday showed that as of the week of October 30, the number of people applying for unemployment benefits for the first time in the United States was 269,000. The previous value was 283,000 (corrected from 291,000), which was better than the 277,000 expected by the market .
The number of initial jobless claims has fallen from a record high of 6.149 million in early April 2020, and is currently within the range that is generally believed to be in line with a healthy labor market .
As of the week of October 23, the number of continued jobless claims fell by 134,000 to 2.105 million. This is also the lowest level since mid-March 2020. Since the government-funded relief fund expired in early September, the number of people receiving assistance has fallen by about 75%.
The decline in initial jobless claims bodes well for the October employment report scheduled to be released on Friday. According to a Reuters survey of economists, non-agricultural jobs are expected to increase by 450,000.
Institutional perspective
Wells Fargo: Non-agricultural employment is expected to increase by 390,000 in October
The US ISM non-manufacturing PMI data released on Wednesday hit a record high. Economic activity has never been so rapid, demand shows no signs of slowing down, and prices show no signs of falling. The main challenge facing the recovery of the labor market remains the problem of labor supply. In the past month, the factors that hindered workers from finding jobs have not disappeared, but as the number of people who do not seek jobs due to fear of the new crown epidemic and caring for children has decreased, many influencing factors have eased. Recently, in the case of a sharp increase in wages, the expiration of the additional unemployment benefit program should encourage workers to return to the labor market. Therefore, we expect non-agricultural employment to increase by 390,000 in October.
Bank of America: Non-agricultural materials increased by 450,000 in October;
① Bank of America expects to add 450,000 jobs in October, and predicts that the pace of recruitment will maintain a relatively high speed for a period of time, because growth is expected to improve;
②Alex Lin, an American economist at Bank of America, said: “We believe that a major limiting factor that has caused the slowdown in the job market in recent months is related to the new crown epidemic, and now it seems that the number of cases and hospitalizations is moving towards the right Direction development."
③Lin predicts: "Restaurants, hotels, and retailers will become areas where workers will be increased by a large amount. We generally expect that wage growth will be stronger in the future."
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