Master the most anticipated economic event in the forex market
The most influential economic indicator for currency markets
The Non-Farm Payrolls (NFP) report is a key economic indicator released monthly by the U.S. Bureau of Labor Statistics, typically on the first Friday of each month at 8:30 AM EST.
This report measures the change in the number of employed people during the previous month, excluding:
The NFP report provides critical insights into the health of the U.S. labor market and is closely watched by traders, investors, and policymakers worldwide as it significantly impacts:
Direct impact on the U.S. dollar's strength
Significant price movements across all assets
Influences Federal Reserve policy decisions
Understanding what moves the markets in each release
The headline number showing net new jobs created in the non-farm sector. Market expectations are typically between +100k to +250k in normal economic conditions.
The percentage of the total labor force that is unemployed but actively seeking employment. Considered "full employment" at 4-5%.
Monthly change in wages paid to workers, indicating inflationary pressures. The Fed watches this closely for wage inflation signs.
The percentage of working-age population either employed or actively looking for work. Shows labor market slack.
How different assets typically react to NFP releases
The U.S. dollar typically strengthens when NFP data exceeds expectations, as it suggests a robust economy and potential Fed tightening. Conversely, weak numbers often lead to USD weakness.
Stock markets often react inversely to the dollar's movement. Strong NFP may initially boost equities but can later pressure them if it suggests aggressive Fed tightening.
Gold often moves inversely to the dollar, while oil reacts more to demand expectations from economic strength.
Strong jobs data typically pushes yields higher (prices lower) on expectations of Fed tightening, while weak data has the opposite effect.
Professional approaches to trading the employment report
This approach aims to capture the initial directional move following the NFP release by entering trades in the direction of the breakout.
This counter-trend approach assumes the initial reaction may be overdone and looks to profit from a reversal back toward pre-NFP levels.
This volatility play involves placing both buy and sell orders to capture large moves regardless of direction, benefiting from the increased volatility.
This approach analyzes the underlying data components to determine the true market implications beyond the headline number.
12 months of Non-Farm Payrolls releases and market reactions
| Release Date | Actual | Consensus | Prior | Unemployment | Wage Growth | USD Reaction |
|---|
How professional traders prepare for the employment report
Get our expert NFP analysis and trading signals before each release