Unlike the ADP, which is expected to have a substantial initial impact on the market, the leading jobs report in the States is anticipated to shed more light on the underlying effect of the COVID-19 fallout and its long-lasting consequences on the US labour market.
Unlike the ADP, the Non-Farm Payrolls is compiled by a national agency (the Bureau of Labor Statistics), and it incorporates labour data concerning the government sector. In that regard, the NFP underscores a more comprehensive representation of the US employment environment.
In the current market environment, which is unprecedented due to the nature of the coronavirus and its impact on the global economy, the NFP is going to be used by economists to comprise longer-term models of the US employment conditions.
The findings of the NFP are expected to underpin the true gravity of last week's jobless claims report, and thereby provide one of the first significant sources measuring the real scope of the COVID-19's impact on the American economy.
In other words, the NFP is expected to provide a more profound and intricate outlook into the COVID-19 fallout and its consequences for the US labour market.
The consensus forecasts project a lesser deterioration in aggregate employment, compared to the projections for the ADP. They estimate the loss of 81 thousand jobs in March, which is still in stark contrast compared to the 273 thousand jobs that were added last month.
Depending on the outcome of the report, the stock market is likely to react in different ways. For the time being, the S&P 500 has managed to bounce back from the market rout’s dip and is currently threading above the major support level at 2474.7 – the 23.6 per cent Fibonacci retracement.
On the other hand, last week’s price action closed below the lower Bollinger Band, which demonstrates strong selling pressure around the 2540 price level.
S&P 500 1W Price Chart. Image source: Trendsharks ©, created with TradingView.com
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