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What to expect from NFP release? |
The U.S. economy added 661,000 jobs in September 2020, dropping sharply from an upward revision of 1.489 million in the previous month, below market expectations of 850,000. Non-Farm employment in September was 10.7 million, or 7.0 percent, below the February level. The largest increases were in leisure and hospitality (318,000), retail (142,000), health and social assistance (108,000), and professional and business services (89,000). Government employment declined (-216K), mainly in education and local government. Nevertheless, the number of jobs in the private sector increased by 877,000, which is higher than the forecast of 850,000. Recent data showed that the labor market is recovering from the impact of the coronavirus on the economy, but at a slower pace than originally anticipated. Of the more than 22 million jobs lost in March and April, only about 11.3 million have recovered.
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Non-Farm Payrolls Employment
Last data: 661K Consensus Forecast: 600K
Non-Farm Payrolls (NFP) is an economic indicator that shows the number of new jobs created in the U.S. non-agricultural sectors each month. It is a very important macroeconomic indicator of the country, which best reflects the dynamics of unemployment in the United States. The total number of people employed in the non-agricultural sector is about 80% of the total U.S. gross domestic product.
U.S. Average Hourly Earnings YoY
Last data: 0.1%
Consensus forecast: 0.2%
This indicator shows the change in the average hourly wage level for major industries, except agriculture.
Unemployment Rate
Past data: 7.9% Consensus forecast: 7.7% Past unemployment data came out better than the consensus forecast of 8.2% - 7.9%. It shows a stable, gradual decrease in unemployment in the USA, which has a positive impact on the U.S. economy and changes the rhetoric of the Fed.
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Keep in mind: - During the NFP announcement, expect high volatility, especially across USD pairs.
- Market sentiment can really affect currency movements. What traders expect from the report has as much impact
as the actual released data, if not greater.
- A higher figure than the one registered during the previous month signifies an improvement in employment numbers. This, as well as the release of a higher-than-expected figure, means an increase in the number of jobs created and are positive for both the U.S. economy and the dollar.
- A lower figure than the one registered during the previous month, as well as a lower-than-expected figure, usually have a negative impact on the dollar as they demonstrate a drop in employment numbers.
- Remember that the sudden spike observed across the charts of many currency pairs upon the release of the NFPs
is usually followed by a period during which the market tries
to recover and return to its initial price levels.
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| Risk Warning:Forex and CFD trading carry a high degree of risk. As such they may not be suitable for all investors. Investors should ensure they fully understand the risks associated with CFD trading before deciding to trade. Investors may choose to seek independent advice and should not risk more than they are prepared to lose. |
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