Among all the indicators published by the American bureau of labor statistics that are used by traders in their working routine, this indicator is a most clear one, that’s why it seriously influences the market situation. Non-Farm Payrolls shows the amount of new vacancies not including agricultural companies. It is published the first Friday proceeding the financial month.
A detailed review on free vacancies in all the industrial sectors excluding the agricultural one allows us to see a rise or a fall in their quantity in comparison with the previous month and calculate the unemployed headcount among the employable population. Thus, any change in the chart shall reflect some serious changes in labor market, which always influences the state of American economy.
How to read the NFP?
A trader’s got to keep in mind that the States are a biggest import country that deals with China and Europe. As a result, the employment rate within the US influences the world’s economy as a whole and touches such sensitive factors as GDP, overall production, consumer spending, trading balance etc.
The main factors in the Non-Farm Payrolls indicator are employment and unemployment, and traders, first of all, study the difference between them and prognoses. For instance, if unemployment is higher than it was predicted, and employment is lower (the amount of new vacancies is reducing), the USD starts to fade. Otherwise, when new vacancies appear in an amount exceeding the one predicted and unemployment lowers down, then the national currency strengthens.
Trading on NFP news
Upcoming news on this indicator shall be considered by any trader, who deals with the USD. Even for those who prefer USD/JPY, the Non-Farm Payrolls indicator is a main one, since the US is the biggest importer for Japan. In general, changes in NFP lead to a movement of price in different markets: product, stock but most importantly, currency exchange market.