After Jerome Powell’s comments following the Jackson Hole meetings in late August, the upcoming Augusts Jobs Report carries less weight than normal. Once the Federal Reserve announced it had little intention of tapering earlier than anticipated, the market moved higher as the primary fear had been set aside for now.
Wednesday’s ADP report shows private payrolls rose by 374,000 in August, mostly coming from the hospitality and leisure sector. This still falls well below the expected value of 600,000 for August. Historically the ADP has been used to predict the Friday release, but the two reports have been far apart numerous times this year.
The consensus estimate for Friday’s payroll number is currently 740,000 new jobs, but the range varies wildly from 377,000 to 900,000. This varied range leads estimates for the unemployment rate to be between 5.1%-5.7%. It certainly seems as though economists are unsure of where the labor market stands and is heading as it recovers from the pandemic. With new variants in the headlines, it will be interesting to see the impact on various sectors of the labor market.
A reported figure within the consensus range should produce a muted reaction from the market as the focus continues to be on the Fed and monetary policy. A value below the consensus range may be taken positively by the stock market as it could be viewed as a continuation of the current conditions. Should the economy show job losses in August things may start to get interesting in the market for traders.
Regardless of the reported figures, traders should anticipate volatile conditions around the release announcement and have a plan in place to manage their own risk.
News events such as jobs reports and announcements by the Federal Reserve can stir volatility in markets and traders should prepare accordingly to protect risk capital. For up-to-date information regarding futures contract expirations, news announcements & more, visit the NinjaTrader Trade Desk Calendar.
