Possible Impact of January’s Non-Farm Payroll Report

Non-farm payroll

The January Non-Farm Payroll (NFP) report is a key economic indicator for the United States. It is intended to represent the total number of paid workers in the United States excluding farm employees, government employees, private household employees, and employees of non-profit making organizations. The report is released every first Friday of the new month by the Bureau of labor and statistics and is among the most market-moving data points for USD, US equities, Treasuries, and Gold.

January Non-Farm Payroll (NFP) will be characterized by the effect of the third wave of the pandemic; curbing the pandemic by the incoming administration under the newly elected president of United States Joe Biden and ensuring that the economy is not negatively affected by the effect of covid-19 while the government restructures the system with respect to job creation.

 According to the Economic Policy Institute, 25.7million workers in the United States remain officially unemployed, otherwise out of work due to the pandemic, or experienced a reduction in work hours or pay.

Although many Economic analysts predict that the USD will weaken as a result of the effect of the global pandemic, the positive is that weekly unemployment claims totaled 787,000 for the week ended January 2, the Labor Department reported, that was less than Don Jones estimate of 815,000 and a slight decrease from the upwardly revised total of 790,000 for the previous week, the report also showed a drop of 126,000 in continuing claims, taking the total down to 5.07 million, those receiving benefit from all programs also fell. And Congress has finally broken a deal to extend unemployment assistance to millions laid off during the pandemic. The $900 billion Covid-19 relief bill will give those receiving unemployment benefits an extra $300 a week and extend two pandemic-specific programs used by 14 million people.

However, Traders should brace themselves up for a period of high volatility in the USD considering the uncertainty surrounding the global economy, a decrease in unemployment will strengthen USD, and an increase in unemployment will weaken USD.

Pairs to look out for EURUSD, GBPUSD, XAUUSD, USDJPY, USDCAD, USDCHF, AUDUSD, NZDUSD.

Time schedule for the next NFP Release:

Date: Friday, January 8th, 2020

Time: 2:30 (GMT+1)

Author:
Francis Idowu is a Forex Dealer, Financial market analyst and writer, Data Analyst, and Financial Market Strategist with a background in Economics. He specializes in market strategies, Forex fundamental and technical analysis, and has spent over two years as a financial market contributor, observer, and trading coach. He is well known for his informative analysis of the global economy, fiat currency, commodities, Stocks, Indexes, Futures, and Options markets. He held a Bachelor's degree in Economics and Diploma in Structured Programming and Data processing.

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