Last Friday’s NFP report reveals there was a slow growth in U.S jobs for December 2017 as retail employment declined across the country as the labor market nears full employment.

The NFP Results.

The Nonfarm Payrolls (NFP) increased by 148,000 jobs in December after going up by 252,000 the previous month as revealed by the Labor Department on Friday. The report further added that the retail payrolls plunged by 20,300 last month, with the figures representing the largest drop since March last year.

There were no changes to the unemployment rate as it remains at a 17-year low of 4.1%. The NFP results were below expectations as analysts had predicted the payrolls increasing by 190,000 in December.

Analysts revealed that the U.S economy would need to create 75,000 to 100,000 jobs per month if it is to keep up with the rise in the working-age population.

Average hourly earnings went up by 0.3% last month after it recorded a 0.1% decline in November. The 0.3% increase witnessed in December lifted the annual increase in wages to a total of 2.5%, up from the previous 2.4% in November.

Even though the job growth is slowing due to the labor market close to full employment, it is likely to be temporarily boosted from a $1.5 trillion package of tax cuts passed by the Congress and signed into law by President Donald Trump in December.

Forex outlook for week Jan 8-12 2018

NFP was the highlight event for the first week of January 2018, let us take a look at the events slated for this week.

JOLTS Job Openings:

Tuesday, 15:00. This represents the number of jobs expected by the Fed. The data for November is expected to rise to 6.05 million after showing a 6 million annualized job openings earlier that month.

Crude Oil Inventories:

Wednesday, 15:30. The relationship between oil prices and the dollar has made the commodity very important. An increase in oil prices will lead to further pressure on the USD. In their last report, a draw of 7.4 million barrels was witnessed.

ECB Meeting Minutes:

Thursday, 12:30. The ECB has kicked off its reduction in bond purchase this month, a decision it made October last year. The next moves and the level of inflation have caused a split among ECB members. In their meeting last month, ECB president Mario Draghi tried to push the EURO lower and failed.

The minutes of the meeting will be released on Thursday and will likely reveal where the members are leaning towards.

US PPI:

Thursday, 13:30. The headline PPI went up by 0.4% in November and a 0.2% is expected now. The

Core PPI was 0.3% in November, beating expectations. A 0.2% increase is expected for December.

US CPI:

Friday, 13:30. The issue of low inflation is still puzzling to the Fed. The GDP growth and a firm increase in employment indicate higher prices. However, that isn’t happening and will likely slow down the Fed’s pace of raising rates. For November, headline CPI inflation rose by 0.4% while core CPI performed below expectation with just 0.1%. For December, both headline and core CPI are expected to surge by 0.2%

US Retail Sales:

Friday, 13:30. This is the last event of the week. In November, the volume of sales surged by 0.8%, and the core sales went up by 1%. After the shopping season in December, retails sales are expected to increase by 0.5% while core sales are forecasted to increase by 0.4%.

Trading Forex

While the week has begun with only one new Forex signal so far, our Forex Trading Team anticipates more opportunity to trade and send signals as the week progresses.