The U.S. economy is expected to add nearly a million jobs in April, with the unemployment rate returning to pre -pandemic levels as more economic activity reopens.
As expected each month in the first week, the market will be shown with the first results of President Joe Biden’s $ 1.9 trillion stimulus package that was approved in March.
Analysts expect stronger growth, with an increase of 978,000 jobs last month after an increase of 916,000 in March. Meanwhile, the unemployment rate is projected to decline to 5.8% from 6.0%.
This expectation is supported by readings from previous data showing economic activity in the US is recovering.
This can be seen from the Gross Domestic Product (GDP) growth in the first quarter which grew at an annual rate of 6.4%, almost identical to the Federal Reserve’s (Fed) forecast in January of 6.5% for the year.
However, the readings recorded in private sector employment made investors skeptical of the published NFP data. This is because the figures recorded fell short of expectations, with an increase of 742,000 from 800,000 in April.
Similar readings were also seen in the employment component in the US services sector of the ISM survey which displayed a slower -than -projected increase.
However, if the NFP reading meets expectations, the US dollar is likely to regain support for the upside.
