NonFarm Payrolls


US jobs report post-release checklist – February 1st, 2019

NFP Actual, Consensus and Deviation PositiveGained +304k.
NFP Revisions NegativeRevised down to 222,000 from 312,000.
Unemployment Rate PositiveEdged up driven by discouraged workers entering the workforce again.
Labor Force Participation Rate Negative63.2% vs previous 63.1%.
Average Hourly Earnings PositiveSame as expected, a +3.2%.


February NFP Shock Resilience

Key datapoints: Maximum of max spreads -- Widest spread we have seen: Max min spread in "The Rage" period -- Nobody could keep it tighter than that. Historical comparison: There was hardly any warm-up phase before the event. Max spreads peaked below 10, 2 spikes, lower than usual and settled faster, almost within 5-10 secs. Extremely minor turbulence.


US jobs report pre-release checklist – February 1st, 2019

Previous Non-Farm Payrolls PositiveUpward surprise from 177K expected to 312K plus Dec revided 21k higher.
Challenger Job CutsPositiveAfter a large jump in layoffs in Dec, a lower number was printed in Jan.
Initial Jobless Claims PositiveThe number of people filing for unemployment benefits decreases substantialy.
Continuing Jobless Claims PositiveA lower reading is seen as positive for the labor market.
ISM Non-Manufacturing PMI NegativeISM’s employment sub-component decreased 2.1% from the Nov reading of 58.4%.
ISM Manufacturing PMI Negative
ISM’s employment sub-component decreased 2.1% from the Nov reading of 58.4%.
University of Michigan Consumer Confidence Index NegativeHuge drop with a surprise factor of -10.6 on FXStreet's Market Impact scale.
Conference Board Consumer Confidence Index NegativeDeclined in Jan, following an decline in Dec.
ADP Employment Report PositiveA higher print, above expected, is a good omen for the NFP.
JOLTS Job Openings NegativeNew lows indicates companies posted less job openings.



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Crash Course to Become an NFP Expert

Have you ever read news updates mentioning rising unemployment or falling payrolls yet you don’t have a clue what these mean for the Forex market?

Well, today is your lucky day the FXStreet team has been working on a research material to make you an expert in trading the NFP report.

Considered the backbone of the U.S. economy, the NFP has an history of rocking global markets, e specially the FX market via the U.S. Dollar. Other signs of economic growth are often viewed with a little suspicion by market participants if employment figures are not at a healthy level.

Since the headline number for NFP tends to move all financial markets, as a trader it is important that you prepare for various scenarios, by developing models to predict the likely headline number and to trade the outcome.

To accomplish that, you should start with a solid understanding of employment conditions in the U.S. The more knowledge you have, the more confident you will feel trading the NFP. Making your own predictions, you don’t need to accept the market estimates as written in stone anymore. Besides, they are often well off the mark.

Ready to make a leap and become an NFP expert?


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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