NonFarm Payrolls

Non-Farm Payrolls beat expectations in June: Stocks rally, US dollar down

US jobs report post-release checklist – Jul 2nd, 2020

NFP Actual, Consensus and Deviation PositiveThe US economy added 4.8M jobs in June, a much better-than-expected figure, although still short of a V-shaped recovery.
NFP Revisions PositiveMay figure was revised slightly upwards, from 2.509M to 2.699M.
Unemployment ratePositive

U3 unemployment rate fell from 13.3% to 11.1%, while U6 underemployment dipped from 21.2% to 18%, both better-than-expected results.

Labor Force Participation Rate PositiveThe share of people in the workforce rose from 60.8% to 61.5%, continuing the recovery started in May.
Average Hourly Earnings NegativeAs people in lower-income jobs gradually come back to work, the average wage figures also are slowly returning to usual ranges, down from 6.6% to 5%.



US jobs report pre-release checklist – Jul 2nd, 2020

Previous Non-Farm Payrolls Positive After the worst US jobs report in history printed in April, NFP numbers bounced big in May showing a +2.5M number of jobs added.
Challenger Job Cuts Positive The number of corporate layoffs fell down from 397K to 170K in June, the best number since the COVID-19 outbreak. 
Initial Jobless Claims Negative Initial Jobless Claims figures are falling very slowly, still printing consistent numbers way above 1 million a week. Not showing a V-shaped recovery there.
Continuing Jobless Claims Neutral The number of unemployment benefit receivers is also slowing down but failing to do so sharply, with a whooping 19.522M being registered on June 12th week. 
ISM Non-Manufacturing PMI Negative Old data from May, as the June figure will be released next week, didn't show much life on the service sector employment sub-component.
ISM Manufacturing PMI Neutral Employment sub-component in the US flagship manufacturing survey recovered from 32.1 to 42.1 in June, but disappointed expectations, still not showing a V-shaped recovery.
University of Michigan Consumer Confidence Index Neutral UMich consumer survey index in June has shown some signs of life, bouncing from 72.3 to 78.1, but it is still way below pre-pandemic numbers.
Conference Board Consumer Confidence Index Positive CB consumer survey index bounced more notably in June, printing a much-better-than-expected 98.1 number.
ADP Employment Report Positive
ADP private employment report showed a gain of 2.369 million jobs in June, a bit lower than expected, but the May figure was revised way up higher: from -2.76M to 3.06M.
JOLTS Job Openings Neutral The lagging job openings indicator collapsed to 5M in April, still showing a more modest fall than expected. Numbers in May expected to tread waters around that level. 



US Non-Farm Payrolls Quick Analysis: The complete labor market surprise

The labor market collapse reversed in May as a totally unexpected gain in employment underlined the resilience of the American economy and the positive impact of the government’s efforts under the $2 trillion Payroll Protection Program to keep people at work. Non-farm payrolls rose by 2.54 million last month, a vast improvement from the 20.5 million who were furloughed in April and less than half the -8 million forecast.


US NFP: When the worst sends markets higher

The US labor market collapse in April surpassed all previous records for job losses but markets have already turned to the future as reopening states spur economic revival hopes. Payrolls dropped by 20.5 million, less than the 22 million estimate and the unemployment rate soared to 14.7%, the highest since 1939 and the end of the Great Depression and just before the Second World War rearmed the US economy.


US NFP Quick Analysis: A grim future partially foretold

American NFP shed 701,000 jobs in March, more that the worst loss during the financial crisis and surprising markets with the Labor Department’s ability to capture the rapid job losses. Economists had predicted just 100,000 firings, expecting the full accounting to be delayed until April as the US slows drastically from the economic impact of the Coronavirus.


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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.