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.

Non-Farm Payrolls

  • 75K-190K range of estimates
  • 110K-150K range most clustered
  • 130K consensus

Unemployment Rate

  • 4.3% (14%)
  • 4.2% (83%) - consensus
  • 4.1% (3%)

Average Hourly Earnings Y/Y

  • 3.8% (10%)
  • 3.7% (45%) - consensus
  • 3.6% (45%)

Average Hourly Earnings M/M

  • 0.4% (2%)
  • 0.3% (71%) - consensus
  • 0.2% (27%)

Average Weekly Hours

  • 34.4 (3%)
  • 34.3 (76%) - consensus
  • 34.2 (21%)

You can notice that the forecasts are leaning towards a softish report. There are more forecasts for higher unemployment rate and lower average hourly earnings figures. Therefore, if the data comes out a bit above consensus, it would have a bigger surprise effect than if the data were to come below consensus.

Source: Forex Live