NonFarm Payrolls

Breaking: Nonfarm Payrolls rise by 130,000 in January vs. 70,000 expected

Nonfarm Payrolls (NFP) in the United States (US) rose by 130,000 in January, the US Bureau of Labor Statistics (BLS) reported on Wednesday. This reading followed the 48,000 (revised from 50,000) increase recorded in December and came in above the market expectation of 70,000.

US jobs report post-release checklist – February 11

NFP Actual, Consensus and Deviation	Positive	US Nonfarm Payrolls rose by 130,000 in January, following the 48,000 increase recorded in December. This print came in above the market expectation of 70,000.
NFP Revisions	Negative	The change in total Nonfarm Payroll employment for November was revised down by 15,000, and the change for December was revised down by 2,000. With these revisions, employment in November and December combined is 17,000 lower than previously reported.
Unemployment rate	Positive	The US Unemployment Rate declined to 4.3% in January from 4.4% in December. This print came in better than analysts’ estimate of 4.4%.
Labor Force Participation Rate	Positive	The Labor Force Participation Rate edged higher to 62.5% in January from 62.4% in December.
Average Hourly Earnings	Neutral	Annual wage inflation, as measured by the change in Average Hourly Earnings, held steady at 3.7%.

US jobs report pre-release checklist – February 11

Previous Nonfarm Payrolls	Negative	US Nonfarm Payrolls rose by 50,000 in December, following the 56,000 increase recorded in November and falling short of the market expectation of 60,000.
Challenger Job Cuts	Negative	US-based employers’ planned layoffs soared 205% to 108,435 in January, marking the highest level for the month in 17 years.
Initial Jobless Claims	Negative	The 4-week moving average of weekly Initial Jobless Claims was 212,250 in the week ending January 31, an increase of 6,00 from the previous week's average.
Continuing Jobless Claims	Negative	The advance number for seasonally adjusted insured unemployment during the week ending January 24 was 1,844,000, an increase of 25,000 from the previous week's revised level.
ISM Services PMI	Neutral	The ISM Services PMI held steady at 53.8 in January. The Employment Index of the survey edged lower to 50.3 from 51.7, highlighting an expansion in the service sector’s payrolls, albeit at a softening pace.
ISM Manufacturing PMI	Neutral	The headline ISM Manufacturing improved to 52.6 in January from 47.9. The Employment Index rose to 48.1 from 44.8 in this period.
University of Michigan Consumer Confidence Index	Positive	The University of Michigan’s Consumer Sentiment Index rose to 56.4 in January from 52.9 in December. The Expectations Index of the survey climbed to 57 from 54.6.
Conference Board Consumer Confidence Index	Negative	The Conference Board’s Consumer Confidence Index declined to 84.5 in January from 94.2. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell by 9.5 points to 65.1.
ADP Employment Report	Negative	Private-sector employment increased 22,000 in January, following the 37,000 growth reported in December. This print came in below the market expectation of 48,000.
JOLTS Job Openings	Neutral	The number of job openings on the last business day of December stood at 6.54 million. This reading followed the 6.9 million openings recorded in November and came in below analysts’ estimate of 7.2 million.

Editors' picks

AUD/USD remains close to three-year top amid the Fed-RBA divergence

AUD/USD attracts some dip-buyers near mid-0.7000s during the Asian session on Monday, stalling last week's modest pullback from a three-year peak. The US Dollar continues with its struggle to attract any meaningful buyers amid bets for further rate cuts by the Fed, bolstered by the softer US CPI report on Friday. In contrast, the Australian Dollar retains a bullish bias on the back of the RBA's hawkish stance, which further acts as a tailwind for the currency pair.

USD/JPY retakes 153.00 after Japan's weak Q4 GDP print

USD/JPY kicks off the new week on a positive note as Japan's weak Q4 GDP growth tempers bets for an immediate BoJ rate hike and undermines the Japanese Yen. Investors, however, seem convinced that the BoJ will stick to its policy normalization path amid hopes that PM Takaichi's policies will boost the Japanese economy. In contrast, cooling US consumer inflation reaffirmed bets for more Fed rate cuts in 2026, which acts as a headwind for the US Dollar and should cap the currency pair.

Gold holds above $5,000 as bears seem hesitant amid Fed rate cut bets

Gold edges lower at the start of a new week, though it defends the $5,000 psychological mark through the Asian session. The underlying bullish sentiment is seen acting as a headwind for the bullion. However, bets for more rate cuts by the Fed, bolstered by Friday's softer US CPI, keep the US Dollar bulls on the defensive and continue to support the non-yielding yellow metal as the focus now shifts to FOMC Minutes on Wednesday.

Week ahead: Data blitz, Fed Minutes and RBNZ decision in the spotlight

The US jobs report for January, which was delayed slightly, didn’t do the dovish Fed bets any favours, as expectations of a soft print did not materialize, confounding the raft of weak job indicators seen in the prior week.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

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BIG PICTURE

NFP: The most important US economic indicator

NFP Definition

The Nonfarm Payrolls (NFP) report measures the number of jobs added or lost in the US economy over the prior month. It is usually released by the US Department of Labor on the first Friday of each month at 8:30 ET.

The report is important because the US is the largest economy in the world and its currency (the US Dollar) is the global reserve currency. This means that many economies peg their currency's value to that of the USD and many commodities such as Gold and Oil are priced in terms of the Dollar.

The NFP report tends to move all markets: currencies, equities, bonds, commodities and cryptocurrencies. It does so immediately after the release of the economic data and sometimes dramatically.

Why is NFP important?

The Nonfarm Payrolls (NFP) report is arguably one of the biggest market movers in the Forex. The NFP figure can influence the decisions of the Federal Reserve (Fed) by providing a measure of how successfully the Fed is meeting its mandate of fostering full employment and 2% inflation.

A relatively high NFP figure means more people are in employment, earning more money and therefore probably spending more. A relatively low Nonfarm Payrolls’ result, on the either hand, could mean people are struggling to find work.

The Fed will typically raise interest rates to combat high inflation triggered by low unemployment and lower them to stimulate a stagnant labor market.

How does NFP affect the US Dollar?

Nonfarm Payrolls generally have a positive correlation with the US Dollar. This means when payrolls’ figures come out higher-than-expected the USD tends to rally and vice versa when they are lower.

NFPs influence the US Dollar by virtue of their impact on inflation, monetary policy expectations and interest rates. A higher NFP usually means the Federal Reserve will be more tight in its monetary policy, supporting the USD.

How does NFP affect Gold?

Nonfarm Payrolls are generally negatively correlated with the price of Gold. This means a higher-than-expected payroll figure will have a depressing effect on the Gold price and vice versa.

Higher NFP generally has a positive effect on the value of the USD, and like most major commodities Gold is priced in US Dollars. If the USD gains in value, therefore, it requires less Dollars to buy an ounce of Gold.

Also, higher interest rates (typically helped higher NFPs) also lessen the attractiveness of Gold as an investment compared to staying in cash, where the money will at least earn interest.

How to trade NFP?

Those who trade NFP releases base their advice on previous preparation and some fundamental research. The elaboration of some macroeconomic analysis is essential for successful trading.

This research includes averages of past headline NFP numbers, Weekly Jobless Claims, ISM reports, or other employment data published earlier such as ADP, JOLTS, or the Challenger report.

Nonfarm Payrolls is only one component within a bigger jobs report and the data can be overshadowed by the other components.

At times, when NFP comes out higher than forecast, but the Average Weekly Earnings is lower than expected, the market has ignored the potentially inflationary effect of the headline result and interpreted the fall in earnings as deflationary.

The Participation Rate and the Average Weekly Hours components can also influence the market reaction, but to a much lesser extent.