Non Farm Payrolls Report Exceeds Expectations

Key Insights

• Non Farm Payrolls declined from 284,000 in October to 263,000 in November. 
• Unemployment Rate was unchanged at 3.7%. 
• U.S. dollar rallied as the report beat analyst estimates by a wide margin.

Non Farm Payrolls Data Shows That Labor Market Remains In A Decent Shape

Today, traders will focus on the U.S. jobs reports, which have been released a few minutes ago.

Non Farm Payrolls report indicated that U.S. economy added 263,000 jobs in November. Analysts expected Non Farm Payrolls of 200,000. October’s Non Farm Payrolls report was revised from 261,000 to 284,000.

Unemployment Rate remained unchanged at 3.7% in November, in line with the analyst consensus. Participation Rate declined from 62.2% to 62.1%.

The Non Farm Payrolls report was a surprise as the recent ADP Employment Change report indicated that private businesses added just 127,000 jobs in November.

U.S. Dollar Rallies As Treasury Yields Rebound

Higher-than-expected Non Farm Payrolls report shows that the economy continues to add jobs at a robust pace. In this environment, the Fed may raise rates aggressively as higher rates have not yet hurt the job market.

Not surprisingly, Treasury yields rallied after the release of the jobs reports. Currently, the yield of 10-year Treasuries is trying to settle above the 3.63% level.

U.S. Dollar Index moved from 104.50 to 105.45 as traders bet on a more aggressive Fed.

S&P 500 futures are down by almost 1.5% in premarket trading as aggressive Fed is bearish for stocks. The tech-heavy NASDAQ Composite, which is extremely sensitive to changes in interest rate expectations, is down by more than 2% in premarket trading.

Gold pulled back towards the support at $1785 as traders focused on the strong rebound of the U.S. dollar.

WTI oil declined from $82 to $81.30. Oil traders are more interested in China’s COVID policy and the upcoming Russian oil price cap.

The Non Farm Payrolls report is the key catalyst for markets today, and traders should be prepared for volatility.

For a look at all of today’s economic events, check out our economic calendar.