The markets are expecting the employment report in the US to be published today (Fri) at 15:30 Israel time. The data is expected to reflect to a large extent the effect of interest rates on the labor market.

The market will look at three key parameters: the rate of wage growth, the unemployment rate and the number of jobs added to the American economy.

The expectation is for the addition of 200 thousand new jobs, an unemployment rate of 3.7% and an annual salary increase rate of 5%.

Modi Shafferer, chief financial markets strategist at Bank Hapoalim, explains that the data to be published today comes after the Fed’s protocol which revealed this week that in the estimation of Fed members “the labor market is still very tight”, as reflected in the data already published this week: “The Jolts data indicated that although about a further decrease in the demand for workers, but this remains at a very high historical level of 10.458 million (and above expectations for a decrease to the 10 million region), so that the ‘number of unemployed per vacancy’ (a figure which the Fed chairman emphasizes as an indicator of the tight labor market) remains in November at a historically low level of 0.6.

“In other words, as of the end of 2022 there are more vacancies (demand for workers) than unemployed (supply of workers).”

Another parameter mentioned by Friar is the “resignation rate”, which rose to a level of 2.7%+ in November, which indicates an expectation of a further rise in wage pressure.

In addition, Shafferer explains that “the new claims for the payment of unemployment benefits dropped unexpectedly last week to their lowest level in the last three months (204 thousand)”.

Another indication that emphasizes the tightness of the labor market is the ADP survey, which has a correlation to the employment data that will be published today. Shafferer emphasizes that the survey indicated the recruitment of 235,000 employed in December, far above the expectation of 150,000 times.