Why it's important?
The ranges of estimates are important in terms of market reaction because when the actual data deviates from the expectations, it creates a surprise effect. Another important input in market's reaction is the distribution of forecasts.
In fact, although we can have a range of estimates, most forecasts might be clustered on the upper bound of the range, so even if the data comes out inside the range of estimates but on the lower bound of the range, it can still create a surprise effect.
Distribution of forecasts
Non-Farm Payrolls
- 100K-246K range of estimates
- 140K-175K range most clustered
Unemployment Rate
- 4.4% (3%)
- 4.3% (35%)
- 4.2% (58%)
- 4.1% (4%)
Average Hourly Earnings Y/Y
- 3.8% (3%)
- 3.7% (76%)
- 3.6% (21%)
Average Hourly Earnings M/M
- 0.4% (2%)
- 0.3% (75%)
- 0.2% (21%)
- 0.1% (2%)
Average Weekly Hours
- 34.4 (4%)
- 34.3 (78%)
- 34.2 (19%)
The focus will be on the Non-Farm Payrolls figure and the Unemployment Rate as the Fed doesn't care about wage growth at the moment.