The Non-Farm Payroll, or NFP in short, is a monthly report issued on the first Friday of every month by the U.S. Bureau of Labor Statistics. For the month of June, the NFP will be on Thursday the 2nd at 12:30 GMT

WHY IS THE NFP IMPORTANT

The NFP report specifies which sector – excluding agricultural, governmental and private households- has added more employees in comparison to other sectors. It also includes additional information such as average hourly earnings and wage increases.

An increase in jobs may be taken as a sign of inflationary pressures, which may lead to an interest rate hike. On the opposite, a fall in numbers may indicate a declining economy, increasing the chances of a rate cut.

 The forecast for this month is at 3,000K

The NFP is a reliable indicator of how the U.S Labor market is fairing and has the power to impact the Dollar and the Stock Market. During the announcement, we are expecting high volatility across USD pairs.

WHAT TO WATCH OUT FOR

  • The percentage of the unemployment rate over the overall workforce because It can influence how the Federal Reserve assesses the US economy.
  • Which sectors show fluctuations in job demand and supply, because these give traders information on specific sectors of the economy which can help in planning better informed and more precise trades
  • The Average Hourly Earnings because If there is a decrease in this number but the number of jobs remains the same then it affects the economy the same way like when people have been subtracted from the workforce
  • Revisions to previous NFP releases because they are an important component that has the power to spark high and sudden volatility in market movement due to traders re-pricing their growth expectations based on these revisions.

An increase in jobs may be taken as a sign of inflationary pressures, which may lead to an interest rate hike. On the opposite, a fall in numbers may indicate a declining economy, increasing the chances of a rate cut.


CLICK HERE TO LEARN MORE ON NFP