United States Non-Farm Payroll; Economic Recovery Hanging on a Pendulum as the Market views Omicron Virus in a Rear Mirror

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.

The economic recovery in recent months has been marvelous even though it has been based on the anticipation that the world would be able to keep ahead of the virus which appears to have resurfaced again in the last few days.

The United States unemployment rate fell to 4.6% in October 2021, the lowest since March 2020 and slightly below market expectations of 4.7%, as the labor market continued to gradually recover from the pandemic hit, helped by a surge in demand for labor, record levels of job openings, expiration of enhanced jobless benefits and subsiding summer wave of COVID-19 infections. The number of unemployed people declined by 255,000 to 7.4 million in October, as employment levels rose by 359,000 to 154 million even as the unemployment rate remained well above the pre-pandemic level of 3.5% amid reports of persistent worker shortages.

The number of Americans filing initial unemployment claims tumbled to 199,000, the lowest level since November 1969 as reported by the labor department, which spate positive economic news signaling that many wrinkles of the nation’s recovery continue to be smoothing out, as the commerce department also reported that consumer spending increased by 1.3% in October, which suggest that Americans are spending continuously despite inflation, which has taken a toll on much of the world recently, with United States standing out as one of the most affected in the last few months at an annual rate of 6.2%, as the U.S. is now seeing prices increase at the highest rate in more than 30 years.

However, the recent job gains and economic progression might be challenged by the resurgence of Covid-19 virus in the form of Omicron virus which has prompted the U.S. to mandate that travelers provide a negative test within 24 hours of their departure, even as President Biden’s administration is hoping that the emergence of the antiviral pills from Merck and Pfizer will help end the most acute phase of the pandemic.

With United States Manufacturing PMI at 59.1%, economists expect the United States GDP to grow by 7.1% at an annualized rate.

Regardless, traders should brace themselves up for a period of high volatility as the Non-Farm Payroll report often have a great impact on the FOREX market. An increase in the Job report will usually strengthen the US Dollar (USD), while its decrease will usually weaken the US Dollar (USD).

Traders should always be aware that volatile markets provide great opportunities for making profits, as the increase in volatility can cause market swings for traders to capitalize on.

Traders can take advantage of the volatility presented by the NFP release by trading currency pairs that include the US dollar, US Futures, US indexes, US Commodities, and Shares are mostly affected by the data release. They include EURUSD, GBPUSD, XAUUSD, USDJPY, USDCAD, USDCHF, AUDUSD, NZDUSD, US100, FTSE, US Oil, Facebook, Amazon, Tesla, etc, on the ACT brokers trading platform (https://actmarkets.com/) with the best spread and trade execution.

Time Schedule for next NFP release:

Date: Friday, 3rd December 2021.

Time: 1:30 pm (GM + 1)

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.