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Non-Farm Payrolls October 6, 2017

Non-Farm Payrolls, US dollar, Euro, macroeconomic data, economic indicator

Non-Farm Payrolls, US dollar, Euro, macroeconomic data, economic indicatorFirst Friday of the month, all the Forex traders are waiting for the most important macroeconomic data of the month, the Non-Farm Payrolls. It's 8:30 am (Eastern Time), the data comes out… -33K!! Unbelievable! And… What? EUR-USD is falling? What the heck!

Well, the thing is not as upsetting as it may seem. Firstly, the quality of wages has increased by 0.5% (forecast + 0.3%) and the unemployment rate fell to 4.2% (forecast and previous data 4.4%). Then, as I explained well in my "Forex with Fundamental Analysis" e-Book, we need to read the data in detail.

Let's take the report. What leapt out at me (and I highlighted in the report on page 6) is the line concerning "Leisure and hospitality" that shows a decrease in employment of 111K. So what does this mean? If we exclude "Leisure and hospitality" from the report, the "Total Non-Farm" results to be +78K, in line with what the analysts had foreseen (+82K).

So, the data is not as bad as one could imagine by just reading a number. The decline of the employment is mainly due to hurricanes which hit the United States in September, so something extemporaneous, not physiological. I recommend to all of you, always read the data of Non-Farm Payrolls in detail before making any conclusion that would be, certainly, over-hasty.

In conclusion, two words about Non-Farm Payrolls. It is released by the Bureau of Labor Statistics on the first Friday of each month. The data is eagerly appreciated by the markets and economists due to its great value in establishing the current US unemployment situation. The report covers the entire U.S. economy, with the exception of farming sector jobs which form a tiny fraction of the overall labour market.

The Non-Farm Payrolls data is closely scrutinized by the Federal Reserve as part of the process leading to the interest rate decisions.

Seasonalgo, seasonal trading, spread trading, commodity market

 

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