Trading conceptsUpdated 2 min readBy the FXNOD team
What is NFP in trading?
NFP stands for Non-Farm Payrolls, the monthly United States report on how many jobs the economy added outside farming. It is usually published on the first Friday of each month and is one of the most market-moving releases, because it shapes expectations for US interest rates. Prices can jump within seconds, so many traders stay out around it.
What the report contains
| Figure | What it shows | Why it matters |
|---|---|---|
| Non-farm payrolls | Jobs added or lost in the month | The headline; a broad measure of the economy |
| Unemployment rate | Share of the workforce without a job | Watched by the central bank |
| Average hourly earnings | Wage growth | A signal for inflation |
| Revisions | Changes to previous months' figures | Can outweigh the headline |
Why it moves markets
Strong jobs and wages suggest the economy can bear higher interest rates, which tends to support the dollar. Weak figures suggest cuts. Because the dollar is on one side of most currency trades, and gold and stock indices respond to US rates too, the release reaches almost every market.
What happens around the release
- Before: quiet trading and widening spreads.
- At the release: a jump, often with no prices in between, so stops fill beyond their levels.
- In the first minutes: a sharp move that frequently reverses as the details are read.
- Later: a steadier direction if the report changed expectations.
How traders handle it
| Approach | What it involves |
|---|---|
| Stay out | Close or avoid short-term trades around the release. The default for beginners |
| Trade the aftermath | Wait 15 to 30 minutes, then trade the direction that holds |
| Trade the release | Experienced traders only, small size, accepting slippage |
Reading the number
Compare the actual figure with the forecast, not with zero. A gain of 150,000 jobs is a disappointment if 220,000 was expected. Then look at wages and the revisions before deciding what the report really said. The first move is often made on the headline alone.
Other releases of the same weight
- Central bank rate decisions.
- Inflation reports.
- The same cautions apply to each.
Synthetic indices
Deriv says its synthetic indices are not affected by external news, so NFP has no effect on them. A bot on a real market should be stopped around the release unless it was built for it.
Questions people ask
- When is NFP released?
- Usually on the first Friday of each month. Check an economic calendar for the exact date and time in your time zone.
- Should beginners trade NFP?
- No. Spreads widen, prices gap and stops slip. Watch a few releases before trading anywhere near one.
- Does NFP affect gold?
- Yes. Gold responds to the dollar and to expectations for US interest rates, both of which NFP moves.
Try it without risking money
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