Big surprise – albeit not for all – in the US Nonfarm Payrolls report for February. The world's largest economy gained 379,000 jobs, around double the early estimates of 182,000. Moreover, it is topped off by upward revisions worth 159,000.
Nonfarm Payrolls (NFP) in the US rose by 379,000 in February, the data published by the US Bureau of Labor Statistics showed on Friday. This reading followed January's increase of 166,000 (revised from 49,000) and beat the market expectation of 182,000 by a wide margin.
100 million doses in 100 days – President Joe Biden's pledge has proved to be a low bar too easy to cross, and that may also be the case for February's Nonfarm Payrolls. If the bar is indeed low, it would be easy to surpass and a trigger for dollar gains.
US Nonfarm Payrolls are forecast to add 180,000 positions in February, far better than the 89,000 average loss in December and January, far worse than the 473,000 gain in October and November.
"Buy the rumor, sell the fact\' – that has been one of the consistent trading patterns through the decades and perhaps the centuries. January 2021's NFP has proved no different.
American employers resumed hiring in January and the unemployment rate fell to a pandemic low as California ended its lockdown and viral rates fell across the country. Nonfarm payrolls add 49,000 positions in January as forecast.
Winter has come – and it is taking its economic toll. The US has shed 140,000 in December, the first fall since the spring, and worse than expected. The virus has been raging in the last month of 2020 and government support was still in the works. Revisions added 135,000 to the previous two months, but the most recent figure is more worrying.
It is all a matter of timing. An increase of 245,000 jobs would be considered robust in the pre-pandemic era, but when the data relates to November 2020, a figure in the upper edge of the old normal represents the end of the recovery.
Positive for COVID-19 – the new about President Donald Trump's trumps everything, even the critical jobs report. The worrying news about the leader of the world's most powerful country has been grabbing the headlines. Yet as seen earlier in the week, investors' immediate concerns are around the next fiscal relief package. Optimism about a Republican-Democrat deal boosted stocks and pessimism sent it down.
The headlines are impressive – a fall of the US unemployment rate to 8.4% and an increase of 1.371 million jobs, within expectations. The upbeat headlines have pushed stocks higher, allowing them to recover after Thursday's sell-off.
EUR/USD is trading above 1.19 after dipping below that number in response to the US Nonfarm Payrolls, which showed an increase of 379K jobs in February. Higher yields in response to Powell are keeping the dollar bid.
GBP/USD is trading above 1.38 bus till down the day. The US gained 379.000 jobs, roughly double than expected and supporting the dollar. The Senate's stimulus debate is eyed.
Gold is staging a rebound toward $1,700 amid proift-taking ahead of the weekend but remains on track to close the third straight week in the negative territory.
Ethereum price aims for a significant recovery towards $2,000. A major upgrade scheduled for July intends to fix the problem with gas fees on Ethereum. ETH miners are not happy with the decision.
The march north in the greenback remains unabated and trade in fresh 2021 highs beyond the 92.00 hurdle when tracked by the US Dollar Index (DXY).
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.
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.
During NFP data release, spreads first fall apart and recover slowly afterwards as market calms down.
The Non Farm Payrolls report is arguably one of biggest market movers in the Forex. Since the NFP report is scheduled this coming week, I thought it would be good for us to take a closer look at this fundamental giant.
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.
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%.”
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.
