NFP and the US jobs report
- NFP is usually released on the first Friday of the month at 8:30 a.m. New York time, and it's one of the most volatile releases.
- The market reads three figures together: job creation, the unemployment rate and average hourly earnings.
- Revisions to previous months can matter as much as the headline number.
Once a month, a huge share of the world's forex traders look at the same thing at the same moment: the US jobs report. Its headline figure, NFP for Non-Farm Payrolls, measures the number of jobs created or lost outside the farm sector. Within seconds, it can move the dollar, gold and US indices dramatically.
Why US jobs matter so much
The Federal Reserve has a dual mandate: maximum employment and price stability. Jobs are therefore part of its goals. A very tight labour market pushes wages and inflation higher, which argues for high rates. A weakening labour market opens the door to rate cuts.
Since the dollar is on one side of the vast majority of currency trades, a surprise in US jobs spreads everywhere: EUR/USD, USD/JPY, GBP/USD, but also gold (XAU/USD), which often moves opposite to the dollar, and indices like the S&P 500.
What's in the report
The report is officially called the Employment Situation and is published by the Bureau of Labor Statistics. It's built on two separate surveys, which is why its figures can sometimes seem to contradict each other.
| Indicator | Source | What it measures |
|---|---|---|
| NFP | Establishment survey (businesses) | Monthly change in the number of non-farm payroll jobs |
| Average hourly earnings | Establishment survey (businesses) | Change in pay per hour, month-on-month and year-on-year |
| Unemployment rate | Household survey | Share of the labour force without a job and looking for one |
| Participation rate | Household survey | Share of the working-age population in the labour force |
Average hourly earnings have become very important: accelerating wages feed services inflation. A weak NFP paired with very strong wage growth can therefore be read as a fairly hawkish signal for the Fed. Always read the three figures together before drawing a conclusion.
When is NFP released?
The report comes out at 8:30 a.m. New York time, usually on the first Friday of the month. That's 1:30 p.m. in London for most of the year. If you trade from outside the US, watch the few weeks each year, in March and in the autumn, when the US and Europe don't change their clocks on the same weekend: the time difference with New York shifts by an hour.
The schedule can also slip: when the first Friday falls too close to the start of the month or on a public holiday, the release can be pushed back a week. Never rely on memory: check the date and time in an economic calendar set to your own time zone.
Months with strong seasonal effects deserve extra attention. Holiday hiring, strikes or natural disasters can distort a month of data. The figures are seasonally adjusted, but those adjustments aren't perfect. A number far from consensus because of a one-off event may be partly ignored by the market.
Revisions: the part everyone forgets
Each report revises the figures for the two previous months, as new business responses come in. Once a year, a broader benchmark revision also realigns the data with more complete statistics. These corrections can be large.
- NFP for the month, consensus
- +180,000
- NFP for the month, actual
- +200,000
- Revision to the previous month
- from +150,000 to +90,000
- Revision to the month before
- from +170,000 to +140,000
- Total revisions
- -90,000
- Net change versus what was already known
- +200,000 - 90,000, so a weaker report than it looks
Made-up figures. The headline beats consensus, but the revisions wipe out most of the good surprise.
The typical market reaction
NFP is the textbook news spike. At exactly 8:30 a.m. New York time, liquidity dries up, spreads widen and price jumps dozens of pips in one or two one-minute candles. The first move often reacts to the headline number. Then the market reads wages, unemployment and revisions, and the move can accelerate or reverse completely.
| Scenario | Reading for the Fed | Likely dollar reaction |
|---|---|---|
| NFP, wages and unemployment better than expected | Higher rates for longer | Up |
| NFP, wages and unemployment worse than expected | Rate cuts more likely | Down |
| Strong NFP but weak wages | Mixed signal | Hesitant move, frequent reversals |
| In-line NFP, big downward revisions | More fragile labour market | Likely down |
Also remember that the market reads the report through the theme of the moment. When inflation is the worry, wages dominate. When recession fears grow, job creation and unemployment carry the most weight. The same number can therefore trigger different reactions depending on the period.
How to approach NFP as a beginner
- Start by watching several releases without trading, noting the figure, the consensus and the reaction on EUR/USD and gold.
- If you have a position open before 8:30 a.m. New York time, ask yourself whether you can live with a violent gap. If not, reduce or close it.
- Don't place market orders in the minute after the release: slippage can be significant.
- If you want to trade the reaction, wait for the first 5- or 15-minute candle to close, then apply your usual plan with a stop.
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