What is NFP?

October 3, 2009

Another week has gone by ! We didn’t reach 3k at the beginning of the week, but came pretty close.

This week was a good one as well, not as spectacular as last week, but still very good. Yesterday was the 1st Friday of the month and as such, the Non-Farm Employment Change in the US (or Non-Farm Payrolls or NFP) came out and this event is considered one of the most important “news” as it can move markets with a vengeance. We did have some movement yesterday, but not as much as some other months.

Here’s what the NFP covers (quote from Forex Factory Calendar section):

Source: Bureau of labor statistics

Measures: Change in the number of employed people during the previous month, excluding the farming industry;

Usual Effect: Actual > Forecast = Good for currency (Note: While this is the 'usual' effect, under current market conditions the reverse tends to be true against some currencies, as bad data has been triggering the purchase of US bonds);

Frequency: Released monthly, usually on the first Friday after the month ends;

Next Release: Nov 6, 2009

FF Notes: This is vital economic data released shortly after the month ends. The combination of importance and earliness makes for hefty market impacts;

Why Traders Care: Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity;

Also Called: Non-Farm Payrolls, NFP, Employment Change;

Have a great week-end once again !