Our newest nowcast suggests US payroll growth is set to decelerate

We are delighted to present CEIC's latest nowcasting dataset: US non-farm payrolls (NFP), one of the most reliably market-moving economic indicators in the world.

NFP is widely watched as a barometer of employment and, by extension, the US economy and prospects for Federal Reserve policy changes. It measures the month-on-month change in the number of employed people (excluding the agricultural industry, government, private households, and nonprofit organizations).

Updated weekly, our nowcast allows for early estimates of NFP before the month has ended. Our latest nowcast calls for payrolls growth to decelerate in June, slipping to 231,360 from 272,000 in May.

NFP is usually released on the first Friday of the month; it's next due on July 5. These payrolls reports have a well-documented history of being especially impactful on the dollar and US bond yields.

For instance, on May 3, 2024, payrolls came in far below expectations (job growth of 175,000, versus the market consensus forecast of 243,000 from Trading Economics). This led to immediate selling pressure on the dollar. Futures on the Dollar Index (DXY) slid 0.8% from the market open, touching a low of 104.4, as our next chart shows. USD dropped 0.66% against EUR, 0.97% against CHF and 0.62% against JPY that day.

CEIC's NFP nowcast has consistently beat consensus forecasts throughout 2024 (as the second pane of our final chart shows). In the May 3 report, for example, CEIC and the street were both calling for NFP growth to slow from March to April. But our nowcast came closer to calling the sharp deceleration that actually occurred.

The high accuracy of our NFP nowcast is based on CEIC’s cutting-edge machine learning methodology, which combines high-frequency data from both established traditional indicators (such as weekly jobless claims) as well as more difficult-to-source alternatives, such as daily e-commerce transactions.

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