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March Non-Farm Payroll and Future Auto Sales

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February 2018 non-farm payrolls

Non-farm payroll (or NFP) data shows the number of jobs added or lost each month in the United States. On March 9, 2018, the US Bureau of Labor Statistics released its employment summary for February 2018. During the month, non-farm payroll data changed by 313,000, much more than the market’s expectation of 205,000.

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Upward revision

On the day of the February 2018 data release, January’s NFP change of 200,000 was also revised upward to 239,000, building optimism. On a non-seasonally adjusted basis, February non-farm payroll data stood at 146,696, higher than the 145,472 reported in the previous month. The manufacturing, mining, construction, and retail trade sectors saw the highest employment growth in February 2018.

Expectations from March NFP data

According to Wall Street analysts’ estimates, NFP change data could drop between February and March 2018. Analysts expect a positive change of 203,000 in NFP, which is lower than the 313,000 NFP change reported in the previous month.

Non-farm payroll data is seen as a key macroeconomic indicator for the auto industry. Dismal employment growth in the country along with lower wages could hurt consumers’ purchasing power, which could discourage them from buying expensive consumer goods such as vehicles.

Nonetheless, the US job market continued to improve significantly in February. Continued growth in March NFP data could keep auto investors’ hopes alive for US auto sales.

Mainstream automakers (VCR) General Motors (GM), Ford (F), Fiat Chrysler (FCAU), and Toyota (TM) make most of their revenue from the US market. Continue to the next article, where we’ll look at consumer sentiment data in March 2018.

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