A monthly U.S. labor market report measuring the number of jobs added or lost in the economy, excluding farm workers, government employees, and nonprofit staff. NFP is widely considered the most market-moving scheduled economic release in forex.
What NFP Measures
Non-Farm Payrolls is released by the U.S. Bureau of Labor Statistics on the first Friday of each month at 8:30 AM Eastern Time. It reports the total number of paid workers in the U.S. economy, excluding agricultural employees, government workers, private household staff, and nonprofit organization employees. The report also includes data on average hourly earnings and the Unemployment Rate.
Why NFP Moves Forex Markets
NFP is the single most watched economic indicator in forex trading. A stronger-than-expected reading typically strengthens the U.S. Dollar (USD) because it suggests economic growth and increases the likelihood of Interest Rate Differential widening through Federal Reserve rate hikes. A weaker number often weakens the dollar as traders price in potential rate cuts.
Volatility around NFP releases can produce 50-100 pip moves in major pairs within minutes. Many traders avoid opening positions in the hour before the release and wait for the initial spike to settle before entering trades. Best Time to Trade Forex
Trading Considerations
Revisions to prior months can be as impactful as the headline number. Spreads widen significantly during the release, and slippage is common. Risk management with appropriate position sizing is essential around NFP.
Related Terms
ADP Employment Report
A monthly report from Automatic Data Processing (ADP) estimating private-sector employment changes based on payroll data. Released two days before Non-Farm Payrolls, it serves as an early indicator of the official jobs report.
Unemployment Rate
The percentage of the labor force that is jobless and actively seeking employment. Released alongside Non-Farm Payrolls in the U.S., the unemployment rate is a lagging indicator that reflects overall economic health.
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