NFP 101: What is the NFP and How You Can Use it to Your Advantage?
What Does NFP Stands For?
The NFP is the Nonfarm Payroll which is a monthly report issued by the U.S Bureau of Labor Statistics. The purpose of this report is to state the number of people in the U.S who are workers of any business, apart from workers from general government jobs, nonprofit employees, private household jobs and farm employees. This report usually goes out on the first Friday of every month and helps governments and economists have a better indication of how the economy is doing and what its future might be. This report is also a good tool that enables economist and traders determine the economy's health.
What’s in it For Me?
The NFP contains roughly 80% of the total nonfarm workers in the U.S and because of that, it says a lot about the economy. The report says how many more jobs were added from last month along with many insights on the labor force, which then affects the U.S. Dollar and the Gold. Traders can use the volatility that comes as a result from the NFP and make substantial amounts of money. An important thing to remember is to read the ADP report prior to the NFP. The ADP National Employment Report goes out every month, two days before the NFP and measures the monthly change in the non-farm jobs area. This report is based on 400,000 people and can predict the NFP report but sometimes the ADP report is not 100% compatible with the NFP. If the results of the NFP report are higher than expected, the market will take a bullish turn for the USD while low results can cause a bearish effect on the USD.
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