[DiaryPoint=Reporter Kim Jung-hoon] The U.S. October jobs report will be released at 10:30 p.m. Korea time on Nov. 6. The U.S. Bureau of Labor Statistics has set the release for 8:30 a.m. Eastern time. With daylight saving time over, Korea is 14 hours ahead of the Eastern time zone.
The first figure to watch is the change in nonfarm payrolls, which counts jobs outside the farming sector. The market consensus compiled by FactSet calls for an increase of 65,000 jobs, with the unemployment rate expected to come in at 4.2%. In September, payrolls rose by 29,000 and the unemployment rate was 4.2%.
The unemployment rate comes from a survey of households, while nonfarm payrolls are measured through a survey of employers. That is why it is useful to look beyond either figure alone and also check hourly earnings, the average workweek and revisions to job growth in the prior two months. In September, average hourly earnings rose 0.1% from the previous month and 3.0% from a year earlier, while the average workweek was 34.4 hours.
If wage growth is strong and hiring proves more resilient than expected, investors may see inflationary pressure persisting, potentially lifting expectations for Federal Reserve rate hikes and market interest rates. Softer jobs and wage figures could temper rate-hike expectations, though a slowdown that fuels concerns about the economy could weigh on stocks. The Fed says its policy rate affects financial conditions and borrowing costs for households and businesses.
South Korean investors can watch U.S. Treasury yields, the dollar, U.S. stock index futures and foreign investor flows in South Korean equities after the release. A rise in U.S. rates and the dollar could put more downward pressure on the won and South Korean shares, while the opposite moves could ease that pressure. These are channels through which a shift in rate expectations sparked by the jobs data may reach South Korean markets.
The Fed raised its benchmark rate by 0.25 percentage point on Sept. 16, setting the target range at 3.75% to 4.00%. Its next meeting is scheduled for Dec. 8-9. The October jobs report is among the key labor-market releases before that meeting, and payrolls, wages and unemployment together could shape market expectations for interest rates.