NonFarm Payrolls


US jobs report post-release checklist – August 3rd, 2018

NFP Actual, Consensus and Deviation NegativeNegative surprise from 190K expected, the actual result was 157K.
NFP Revisions PositiveRevised up from 213K to 248K.
Unemployment Rate PositiveGoes down again, from 4.0% to 3.9% as expected.
Labor Force Participation Rate NegativeStays at 62.9% despite expectations had it rising to 63.0%.
Average Hourly Earnings NeutralStay at 2.7% as expected.

NFP Recap: 'Steady as she goes' for the Fed

As we noted yesterday ahead of today’s NFP release, “[There have been] no signs that a pickup in price pressures is imminent, [and therefore] the Federal Reserve is content to stick with its gradual, every-other-meeting rate hike schedule…”. Today’s US jobs report will do little to blow the Fed off course. Tackling the headlines first, overall job creation came in lower than expected, with the BLS estimating that the US economy created only 157k new jobs in July, below economists’ expectations of a 193k increase. That said, revisions to the previous two months’ reports added 59k total jobs, bringing the three-month average of job creation to 224k, above the recent trend level.

US – Labor market remains strong overall

No potentially market-moving events are scheduled for the upcoming week. So, markets will take their guidance from this week's releases, possibly enhanced by one tweet or another. Periods like this give us the opportunity to look a bit further ahead, and this outlook shows that the current summer doldrums should be enjoyed. For the autumn, major political events lie ahead, with the potential to move markets.

US jobs report pre-release checklist – August 3rd, 2018

Previous Non-Farm Payrolls PositiveSlightly positive surprise from 195K expected the actual result was 213K.
Challenger Job CutsPositiveThe number of corporate job layoffs diminished from 37.2k to 27.122k, a positive sign.
Initial Jobless Claims PositiveLess job petitions at 218k than it was expected (220k), although a bit more than last week (217k).
Continuing Jobless Claims PositiveUnemployed individuals who are receiving benefits went down to 1.724M from 1.747M of last week.
ISM Non-Manufacturing PMI NegativeThe employment sub-index reflects a decrease of 0.5% in June when compared to the May reading.
ISM Manufacturing PMI Positive
ISM’s employment sub-component increased 0.5 when compared to the June reading of 56.0.
University of Michigan Consumer Confidence Index PositiveA higher reading (97.9) indicates consumers are prone to spending more.
Conference Board Consumer Confidence Index PositiveThe index increased in July, now standing at 127.4, following a modest decline in June.
ADP Employment Report PositiveWay above expectations (219k, better than 185k expected), with gains in all key sectors.
JOLTS Job Openings PositiveA higher reading at 6.638M indicate companies are posting more job openings.


US jobs report post-release checklist – July 6th, 2018

NFP Actual, Consensus and Deviation PositiveSlight positive surprise from 195K expected the actual result was 213K.
NFP Revisions PositiveRevised up from 223K to 244K.
Unemployment Rate NegativeAn increase from 3.8 to 4.0 (expected was 3.8%) is seen as negative.
Labor Force Participation Rate PositiveIncreased from 62.7% to 62.9%.
Average Hourly Earnings NegativeExpected was 2.8% (as previous) but released was 2.7%.

July NFP Shock Resilience

One thing you will need to know when preparing to trade the Employment Situation report is the difficulties there are to trade the NFP release through broker platforms. We constantly hear about the increase in bid/ask spreads and prices not being accessible for seconds after the release.


US jobs report post-release checklist – Jun 1st, 2018

NFP Actual, Consensus and Deviation PositiveSlightly positive surprise from 188K expected the actual result was 223K.
NFP Revisions NegativeRevised down from 164K to 159K.
Unemployment Rate PositiveA decrease from 3.9 to 3.8 (expected was 3.9%) is seen as positive.
Labor Force Participation Rate PositiveIncreased 0.1% to 62.7%.
Average Hourly Earnings NeutralA print of 2.7% same as expected with no revisions.

June NFP Shock Resilience

One thing you will need to know when preparing to trade the Employment Situation report is the difficulties there are to trade the NFP release through broker platforms. We constantly hear about the increase in bid/ask spreads and prices not being accessible for seconds after the release.

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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, especially 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 Nonfarm Payrolls 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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