NFP means Nonfarm Payroll and is a report released every month by the United States Bureau of Labor Statistics showing the Employment Situation in the United States.
It is called Nonfarm Payroll because the report only addresses the number of new jobs created in Nonfarm sectors of the economy.
The NFP report does not include jobs created in the agricultural sector & Nonprofit sectors hence its name.
What Does Nonfarm Payroll Look Like & Where Can I Find It?
The Nonfarm payroll Report is basically a text format report you can download to your system.
To find the United States NFP Report, visit the Bureau for Labor Statistics website https://www.bls.gov/ and navigate to “Economic Releases” then click on “Unemployment Situation”.
See a screenshot of a Nonfarm payroll report below:
You can also find unemployment statistics for the European Union on the Eurostat website https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Unemployment_statistics
See below another screenshot of unemployment information gotten from the Eurostat website:
How Do I know When NFP Will be Released?
Check the Schedule of Releases on the BLS Website
By checking the Schedule for News Releases on the US Bureau of Labor Statistics website.
You visit the Bureau of labor Statistics Website, navigate to “Economic Releases” & then click on “Schedule of News Releases”
Check Our MTL Economic Calendar
Our Economic Calendar is on this platform & can be accessed here
Our Economic Calendar is updated every day with the dates when economic data will be released, as well as their market impact strength.
Why is the Nonfarm Payroll Important to Forex Traders?
NFP is important in forex because the United Stated federal Reserve Board (US Central Bank) consults NFP data when deciding whether to cut or increase interest rates.
if the NFP report shows unemployment is falling, investors will have more confidence in the US Dollar causing it to appreciate against other currencies.
However, if the NFP report shows unemployment has increased, investors will lose confidence in the US Dollar & may take a risk-on approach to investing. This will cause the dollar to depreciate.
This is why once NFP data is released, you see price reacting wildly and reaching new highs & new lows. All of this volatility is caused by investors reacting to the NFP data.
See below an image showing the market reaction to August 2024 NFP data on a EUR/USD chart:
From the above image, EUR/USD was trading within a certain range but once the NFP was released the price suddenly spiked up breaking through the resistance line
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