Understanding NFP: Non-Farm Payrolls Explained | NAGA Learn (2024)

FAQs

How to read NFP results? ›

How to Read the NFP? The NFP measures the number of jobs created or lost in the U.S. economy over the prior month. For example, -1000K means 100,000 jobs were lost in all non-agricultural businesses. To get a feel for the employment situation, it's good to review the history of previous NFP releases.

Usually, this is done using the average of a group of professional analysts – if NFP significantly 'beats' or 'misses' this consensus, a major market move may follow. If it falls roughly in line with expectations, volatility may remain low.

Nonfarm payrolls (NFPs) are the measure of the number of workers in the United States, excluding farm workers and workers in a handful of other job classifications.1 It indicates the growth or shrinkage of the labor force in the country over the previous month.

Non-Farm Payroll Data

The increase is an indication that the economy is growing when non-farm payrolls are expanding but this may lead to an increase in inflation. That may be viewed as a negative for the economy if increases in non-farm payroll occur at a fast rate.

One way in which traders can consider utilising an OCO order when trading the NFP is by using a breakout strategy. A breakout strategy consists of establishing a range around the price of an asset and then entering a long or short position once the price breaks out of this predetermined range.

Net filtration pressure (NFP) = glomerular blood hydrostatic pressure (GBHP) – [capsular hydrostatic pressure (CHP) + blood colloid osmotic pressure (BCOP).

NFP releases have a general tendency to cause large movements in the forex market. If the Fed decides to lower interest rates to combat high unemployment, it reduces demand for the dollar, causing it's the dollar's price to fall.

Traders choosing to trade before the release have been known to use the 4-hour chart to mark the high and low 15 minutes before the NFP release. They often place the sell order below the low, and buy order above the high on the chart.

Nonfarm Payroll Data and Economic Analysis

The report contains insights into the labor force that directly impact the economy, the stock market, the value of the U.S. dollar, the value of Treasuries, and the price of gold.

Is non-farm payroll a leading indicator? ›

The nonfarm payroll report is not a leading indicator for the labor market, but it is a coincident indicator for the overall economy. For example, as firms' labor costs go up, prices can go up. The total nonfarm payroll employment report also tells us how many jobs were created or lost in specific industries.

The NFP figure can affect the US Stock Market in 2 ways. A higher-than-expected NFP figure can indicate a resilient economy and higher consumer demand. As a result, companies perform better; earnings are higher, as is investor confidence. This can cause the stock market to rise.

With a few exceptions due to market holidays, non-farm payroll data hits the newswires at 8:30 a.m. Eastern Time on the first Friday of every month.

The Bureau of Labor statistics normally releases the NFP data on the first Friday of every month at 8:30 AM ET, which is 13:30pm UK time. You can keep track of upcoming Non-Farm Payroll releases, along with other important events using ourfree Forex calendar. Want to see all the upcoming economic events?

Non Farm Payrolls in the United States increased by 114 thousand in July of 2024. Non Farm Payrolls in the United States is expected to be 130.00 Thousand by the end of this quarter, according to Trading Economics global macro models and analysts expectations.

However, if the NFP report is on the negative side, depicting high unemployment, low hourly wages and fewer jobs created in the past month, the USD will start depreciating. Traders can short USD in a downtrend with an expectation of a continued falling market.

The NFP figure can affect the US Stock Market in 2 ways. A higher-than-expected NFP figure can indicate a resilient economy and higher consumer demand. As a result, companies perform better; earnings are higher, as is investor confidence. This can cause the stock market to rise.

Conversely, if the NFP data is weaker than expected or suggests economic weakness, traders may consider buying gold with an expectation that gold prices may increase in the coming future.

NFP releases have a general tendency to cause large movements in the forex market. If the Fed decides to lower interest rates to combat high unemployment, it reduces demand for the dollar, causing it's the dollar's price to fall.