non farm payroll

However, semiconductor stocks do not trade in expectation of a deep recession. For example, Micron Technology, Inc. (MU) lost $1.91 a share as revenue fell by 52.6% Y/Y to $3.69 billion. The stock market’s embrace of rumors and old economic data suggests that bullish sentiment will not reverse. The report provides fresh insight into the overall health of the U.S. economy and how the labor market is doing. We’ll cover this strategy in more detail in the Advanced trading strategies course. If you’re considering employing it, just remember that there’s no guarantee of a pullback working.

Is it good to trade on NFP?

NFP data and the US-Dollar

Positive NFP numbers are good for the economy and, thus, investors will buy US-Dollars, anticipating a stronger economy in the future. A worse than expected NFP often leads to a falling US-Dollar as investors sell their US-Dollars.

Whether you’re a fundamental trader or primarily rely on technicals, the NFP report regularly creates large price-movements in the market that can affect your trading performance. Occasionally, the report can send shockwaves through the market if the actual number significantly differs from market expectations. Investopedia does not provide tax, investment, or financial services and advice. The information is presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors.

NFP Analysis: Shock growth shows worker supply is rising, inflation to fall, US Dollar to retreat

A monthly employment report produced on the first Friday of every month, nonfarm payrolls have a significant impact on the value of the US dollar, the bond market, and the stock market. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77.1% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

A better-than-expected NFP number may be beneficial for the Canadian dollar as well, as the Canadian economy is strongly tied to the US economy. More jobs in the United States could mean more orders for Canadian companies and higher export values, for instance. If the US dollar jumped higher on Friday on a strong NFP number, the market will usually sell the greenback on Monday. Similarly, if the US dollar falls on Friday on a weak NFP report, the market will usually buy the dollar on Monday.

Non-farm payrolls (NFP)

Keep track of the ranges and see if the recent reports were near historic highs or lows. The Employment Situation Report also includes the Labor Force Participation Rate, the Unemployment Rate, Average Hourly Earnings, and Average Workweek Hours, among many other statistics. NFP stands for Non-Farm Payrolls, which is actually part of the Employment Situation report, released by the Bureau of Labor Statistics, an agency for the U.S. It takes a while for currency pairs to start moving in more typical patterns and it is at this point that a wider pool of traders may look to get involved. Pivot points are a technical indicator that traders use to predict upcoming areas of technical significance, such as support and resistance. Large fluctuations in wage inflation are often factored into the Federal Reserve’s decision-making; and the number of hours worked in the report period may also be monitored for changes or irregularities.

non farm payroll

The mix of moderating job gains and slowing wage growth is a boon for companies who face a lower risk of recession and need to pay less to their workers. According to the latest Nonfarm Payrolls, the job market is slowing down to a “Goldilocks level” – not too hot nor too cold. For markets, it means ongoing growth but with lower inflation and interest rates.

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