NonFarm Payrolls


NFP: Solid data means only Trump can stop the USD rally

It is rare to see the Non-Farm Payrolls meeting expectations – 164K against the same number expected. Wages have risen by 0.3%, above 0.2% projected, and 3.2% year on year – bang on expectations. While downward revisions knocked down some 32K of job gains from previous reports, other figures are encuraging.

US jobs report post-release checklist – Aug 2nd, 2019

NFP Actual, Consensus and Deviation Positive The US Non-Farm Payrolls came out at 164K, within expectations.
NFP Revisions Negative Downward revised from 224k to 193k.
Neutral Neutral Number unchaged.
Labor Force Participation Rate Positive Rises a tick from 62.8% to 62.9%, a positive development.
Average Hourly Earnings Positive Wages upbeat, means the Fed may pause in September.

US jobs report pre-release checklist – Aug 2nd, 2019

Previous Non-Farm Payrolls Positive Beats expectations with 224k, recovering the healthy bigger-than-200k job creation pace.
Challenger Job Cuts Positive The number of corporate layoffs went down again in July from 41.98k to 38.85k.
Initial Jobless Claims Negative The 4-week Jobless Claims moving average is moving higher since Dec 2018.
Continuing Jobless Claims Negative A negative surprise in the lastest release.
ISM Non-Manufacturing PMI Negative Notable fall in the Employment sub-index for the Non-Manufacturing PMI, as it fell 3.1% in June, from 58.1% to 55.0%.
ISM Manufacturing PMI Negative The Employment Index registered 51.7% in July, a decrease of 2.8% points when compared to the June reading.
University of Michigan Consumer Confidence Index Neutral UMich consumer survey retraced a bit from last month's decade-highs, but still sitting comfortably on the high-end of a long-term uptrend.
Conference Board Consumer Confidence Index Positive The Conference Board Consumer Confidence Index® rebounded in July, following a decrease in June.
ADP Employment Report Positive The very-correlated-to-NFP private report showed only 156k jobs added, plus upward revised from 102k to 112k.
JOLTS Job Openings Positive Job openings stayed at 7.32M in June, still very close to the multiyear highs seen earlier in the year.


US jobs report post-release checklist – Jul 5th, 2019

NFP Actual, Consensus and Deviation Positive Beats expectations with 224k, recovering the healthy bigger-than-200k job creation pace.
NFP Revisions Negative Last month dismal headline report was slightly revised down from 75k to 72k.
Unemployment Rate Negative Unexpectedly rose a tick from the record-low 3.6% to 3.7%.
Labor Force Participation Rate Positive Rises a tick from 62.8% to 62.9%, a positive development.
Average Hourly Earnings Negative Both monthly and yearly figures printed stable wage-growth ratios, unable to rise a tick to 0.3% and 3.2% as expected.

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The NFP report: The most important economic indicator for the US

NFP Definition

NonFarm Payrolls report measures the number of jobs added or lost in the US economy over the last month. It is released usually on the first Friday of each month, at 8:30 EST. It is published by the US Department of Labor.

This report is important because the US is the largest economy in the world and its currency (US Dollar) is the global reserve currency. The many economies peg (tie) their currency's value to the reserve currency, many commodities such as gold and oil are priced in terms of the reserve currency and the local economy's debt is priced in terms of its own currency.

The NFP report, because of its importance to the reserve currency, tends to move all markets: currencies, equities, treasuries, interest rates and also commodities. It does it so immediately after the release of the economic data and sometimes so dramatically.

US Departament of Labor

The mission of the DOL is to assure the prosperity of the wage earners, job seekers which includes more than 10 million employers and 125 million workers in the USA. 180 federal laws and several federal regulations are the key of the Departament Labor promotion of benefits and rights.

To Trade...

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

This research includes averages of past headline NFP numbers, Weekly Jobless Claims, ISM Industry Data reports or other employment reports as the ADP or the Challenger. Tracking these events is fundamental on the preparation of the trades to set up just after the release. You can check all this data on FXStreet Economic Calendar: ADP Report, Initial Jobless Claims, ISM Industry Data.

... Or Not to Trade

A lot more skeptical on the benefits of trading the event, as you can read in his article “Step aside the NonFarm Payrolls release”, Adrián Aquaro, President at Trader College, says its importance has decreased a little bit lately:

“Even if the impact has diminished gradually over time, still generates huge attention on the markets and it normally drives important monthly trends. Lately another event (the Fed Monetary Policy Meetings) has been driving similar attention, thanks mainly to the Interest Rates being at 0%.”

What is a NonFarm Payrolls Forecast?

A NonFarm Payrolls Forecast is some sentiment-based piece of content that tries to predict what the NFP numbers will be and what impact will they have on the markets. In this page, you'll find some articles and tools that will help you to understand which could be the outlook for ADP Report, Unemployment Rate, Average Hourly Earnings, Labor Force Participation Rate and some other important economic indicators.

The ADP (National Employment Report) is an estimation of nonfarm employment which is based on a survey of thousands of private sector businesses. One of the biggest differences between NFP data and ADP data is the sample and methodology of the study. ADP Jobs Report could show us an anticipation of the NFP's trends. Some outlooks are mainly based on the Jobs Report, in past data and in other related job indicators like Initial/Continuing Jobless Claims.

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