The 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 U.S excluding farm employees, government employees, private household employees, and employees of non-profit making organizations. The report is released every first Friday of a new month by the Bureau of labor statistics and is among the most market-moving data points for US Dollars, US equities, Treasuries, and Gold.
Another strong United States employment report is likely after the previous forecast of 407,000 was outpaced by the outcome of 678,000, as the labor market met Fed’s objectives.
The strength in the job market reported by the Labor department may push the Federal Reserve to further raise interest rates at its next policy meeting in May, according to the Fed Chair, Jerome Powell; U.S central bank must move expeditiously to raise rates and possibly more aggressive to keep high inflation from becoming entrenched.
The recent surge in job addition is evident in the application for U.S unemployment insurance which fell to its lowest since 1969, a decrease of 28,000 to 187,000, as continuous claims for state benefits also dropped to 1.35 million. The drops in claims are consistent with a labor market in which employers are desperately trying to hang onto workers, while also trying to attract new ones, according to Chris Rupkey, chief economist at FWDBONDS, more reason why workers’ wages are soaring as company managers offer carrots where they used to give outs sticks.
Moving forward, some economists warned that new cases of fast-spreading sub-variant of omicron known as BA.2 could at least temporarily disrupt mobility and economic activity across the country, as of this week, about 1/3 of COVID-19 cases in the united states have been attributed to the sub-variant, though overall new infections have been trending down from January’s record high.
The strong demand for labor reflects strong demand for goods and services, suggesting that the United States economic recovery is riding strong, however, the war in Ukraine and high inflation fueled by rising oil prices due to the war may dampen economic growth.
Currently, the United States unemployment rate is 3.8%, an improvement from 4.0% the previous month, and US ISM Manufacturing PMI is at 58.60, up from 57.60 last month, as experts forecast that GDP growth will slow to 1.7% in the first quarter.
Nevertheless, Traders should brace themselves up for a period of high volatility as an increase in Non-farm payroll will strengthen the United States dollar (USD) while a decrease will weaken the United States dollar (USD).
In response to the news release, trade the forex market with the following trading instruments on the ACT Brokers platform, as the pairs are mostly affected by the data release; EURUSD, GBPUSD, XAUUSD, USDJPY, USDCAD, USDCHF, AUDUSD, NZDUSD, US30, US100, USOIL, US Oil, Facebook, Amazon, Tesla, etc.
Time Schedule for next NFP release:
Date: Friday 1st April 2022
Time: 1:30 pm (GMT + 1)
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