Today's NFP data, which significantly impacts the United States (US), will be announced by the Bureau of Labor Statistics (BLS) on Friday at 13:30 GMT (21:30 WIB).
 
What is anticipated in the upcoming Nonfarm Payrolls report?
 
The US labor report is expected to show a growth of 180,000 jobs for last month, up from 150,000 in October. The unemployment rate is predicted to remain at 3.9%. Wage inflation, measured by Average Hourly Earnings, is expected to increase by 4.0% year-over-year through November, slightly lower than the previous month's 4.1%. Month-over-month, Average Hourly Earnings are projected to rise by 0.3%, compared to a 0.2% increase in October.
 
US labor market data has a significant influence on the Federal Reserve's (Fed) interest rate outlook for 2024, greatly affecting the valuation of the US Dollar (USD).
 
In an environment of declining inflation in the US, the market speculates that the Fed has finished its tightening cycle and anticipates a rate cut as early as March. Currently, the odds of a Fed rate cut in that month stand at 60%, according to the CME Group's FedWatch Tool.
 
Betting on a Fed rate cut has increased after Fed Governor Christopher Waller, known for his hawkish stance, indicated a shift in policy direction. This is seen as unfavorable for the US Dollar and US Treasury yields.
 
Waller stated on November 28, "If inflation continues to decline for a few more months... three months, four months, five months... we could start lowering the policy rate simply because inflation is lower."
 
The October Core PCE Price Index data also supports the Fed's dovish outlook. The Fed's preferred inflation measure rose 3.5% year-over-year, slightly down from 3.7%, but still well above the Fed's target of 2.0%.
 
Although Fed Chair Jerome Powell has tried to temper expectations for rate cuts next year in his recent public appearances, the market has not embraced his hawkish rhetoric. Powell stated, "It is too early to conclude with confidence that we have reached a sufficiently restrictive stance or speculate on when policy will be loosened." "We are prepared to tighten policy further if necessary," he added.
 
On Wednesday, Automatic Data Processing (ADP) reported that US private sector wages increased by 103,000 in November, down from October's revised figure of 106,000, and below the expected 130,000. The Job Openings and Labor Turnover Survey (JOLTS) report showed that job openings in the last business day of October reached a 2.5-year low of approximately 8.733 million.
 
This week's US employment data indicates a weakening labor market. If the November Nonfarm Payrolls data next Friday also shows weakness, it could heighten speculation about a Fed rate cut.
 
Reviewing the US labor market data, analysts at TD Securities stated, "Job gains are expected to provide a boost in November, with payrolls rebounding to exceed 200,000 after the surprising drop in expectations for the October report."
 
This gain partly reflects the end of the UAW strike, which had a significant impact on manufacturing jobs in the previous report. We also project the unemployment rate to fall by one-tenth to 3.8%, while wage growth is expected to reach 0.3% month-over-month.
 
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