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Video Manual: Non farm Payroll - Economic Reports for All Markets

30 June 2015, 06:11

Sergey Golubev

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Non-farm Payrolls is the assessment of the total number of employees recorded in payrolls.

This is a very strong indicator that shows the change in employment in the country. The growth of this indicator characterizes the increase in employment and leads to the growth of the dollar. It is considered an indicator tending to move the market. There is a rule of thumb that an increase in its value by 200,000 per month equates to an increase in GDP by 3.0%.

Release Frequency: monthly.
Release Schedule: 08:30 EST, the first Friday of the month.
Source: Bureau of Labor Statistics, U.S. Department of Labor.

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Source : Bureau of Labor Statistics
Measures : Change in the number of employed people during the previous month, excluding the farming industry
Usual Effect : Actual > Forecast = Good for currency
Frequency : Released monthly, usually on the first Friday after the month ends
Why Traders Care : Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity
Also Called : Non-Farm Payrolls, NFP, Employment Change

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AUDUSD M5 with 45 pips in profit (by equity) for NFP :

EURUSD M5 : 87 pips price movement by NFP news event :

#fundamental analysis, nfp, Non Farm Payroll

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Sergey Golubev 2015.06.30 17:38 #1

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Press review

Sergey Golubev, 2015.06.30 19:30

Bank of America Merrill Lynch about Non-Farm Payrolls on Thursday (based on efxnews article)

"The employment report is likely to show another solid month of job creation in June. We look for job growth of 220,000, a slowdown from the 280,000 pace in May but consistent with the recent trend.
As a result, the unemployment rate will likely lower to 5.4% from 5.5%. With the continued tightening in the labor market, we think average hourly earnings (AHE) will increase a “strong” 0.2%, allowing the yoy rate to hold at 2.3%."
"Within the components of the establishment survey, we expect private payrolls of 215,000 with the government only adding 5,000. Similar to last month, we expect the goods side of the economy to reveal weaker job creation, consistent with the softer trajectory of industrial production and capital expenditures. Moreover, we have yet to see the end of job cuts in the energy-related sectors. That said, there should be some support from greater construction hiring given the improvement in homebuilding. On the services side, we look for broad-based expansion in jobs with particular gains in leisure and hospitality and overall business services."
"The household survey, which provides the data on the unemployment rate, should also show solid job growth. The three-month average has been a bit softer than nonfarm payrolls, with growth of only 166,000, but the six-month average has been consistent at 244,000. A wildcard is the change in labor force participation. After a sharp gain of 0.11% in May, we look for little change in June, given the volatile nature of the series. Smoothing through, the labor force participation rate has been essentially moving sideways since last fall, suggesting that a cyclical gain has managed to offset the secular downward pull."