NonFarm Payrolls

NFP beats expectations with a rise of 638K

US jobs report post-release checklist – Nov 6th, 2020

NFP Actual, Consensus and Deviation Positive The US economy added 638K jobs in October, a bit better than the 600K expected.
NFP Revisions Positive September figure revised upwards, from 661K to 672K.
Unemployment rate Positive

U3 unemployment rate fell from 7.9% to 6.9%, overcoming expectations of 7.7%. U6 underemployment rate also down from 12.8% to 12.1%.

Labor Force Participation Rate Positive The share of people in the workforce expanded from 61.4% to 61.7%, matching the post-pandemic high.
Average Hourly Earnings Negative Both the yearly (4.5%) and the monthly (0.1%) wage growth figures disappointed expectations (4.6% and 0.2% respectively).



US jobs report pre-release checklist – Nov 6th, 2020

Previous Non-Farm PayrollsNegativeThe US economy added 661K jobs in September, way worse than expected and less than half the number in August.
Challenger Job CutsPositiveThe number of corporate layoffs has retraced again in October (80.66K), down below 100K for the first time since the pandemic struck. 
Initial Jobless Claims PositiveFirst-time employment claims resumed the post-pandemic downtrend in the last couple of weeks, finally breaking below 800K per week.
Continuing Jobless Claims PositiveThe number of unemployment benefit claimants downtrend has accelerated in the last month, from more than 11M to below 8M in the week ending on Oct 16.
ISM Services PMI PositiveThe employment sub-index in the US main services survey has now registered two consecutive months of expansion.
ISM Manufacturing PMI PositiveThe employment sub-index in the US main manufacturing survey has accelerated its recovery, jumping to expansion territory in October for the first time since July 2019.
University of Michigan Consumer Confidence Index PositiveThe UMich consumer sentiment survey continued its slow recovery in October, rising from 80.4 to 81.8, still far from pre-pandemic levels.
Conference Board Consumer Confidence Index NeutralThe Conference Board Consumer Confidence Index® has seen its recovery halted in October, although it stays above 100.
ADP Employment Report Negative
Private sector employment just added 365K jobs in October, much lower than the 650K expected.
JOLTS Job Openings NeutralThe hiring recovery slowed down in August, printing 6.49M job openings, down from 6.697M from July, but still way up from the numbers seen during the spring months. 



NFP Quick Analysis: Stocks set to fall as sub 8% jobless rate lowers chances for stimulus

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.




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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.