Non-Farm Payroll; US Job Market Recovers Speedily, Labour Shortages Stood as Constraint


The Non-Farm Payroll (NFP) is a monthly measure of the United States labor market health, released every first Friday of the month by the Bureau of Labour Statistics. It is a key economic indicator for the United States economy and among the most market-moving data points for the US Dollar, US equities, Treasuries, and Gold.

Tracking the growth pattern, the United States job market has remained resilient amid the pandemic drift and recession hit. Its rebound is the strongest among the big western economies. The job lost to the pandemic are now seen recovering speedily across the different sectors of the economy which cut across the Construction and manufacturing sector, transportation and warehousing, professional and business services, technologies, and the hospitality industry. The multiple rounds of government stimulus above $5.2 trillion injected into the economy and the Fed low rate are some of the strong drivers of the growth.

However, the major setback is that employers are reporting difficulties in hiring and retaining workers despite the salary raises, massive economic recovery, and increased demand for workers. According to a source report, “The United States economy is experiencing two historic surprises; first, demand for workers is soaring at a velocity rarely seen before. Secondly, despite companies going all out to hire millions of workers, millions of workers either retired early or stayed on the sidelines”.

This could be one of the most unusual job markets in modern American history. This phenomenon could trigger a move in contrast with the market expectation and bring a defeat to the US economy in the year 2022 unless it is managed efficiently.

Another factor that could deter growth is the severe cases of the omicron virus hitting hard on the economy. As the covid-19 variant keeps spreading with rising infections across the United States, the health facilities are being overstretched and confidence is being lost. However, many analysts said that the omicron virus has no ability to retard the economic growth spectrum as the nationals are being vaccinated and re-opening steadies.

Scanning the market performance of the US dollars (USD), it launched into the year 2022 with massive gains sliding against the European currencies such as GBP, EUR, CHF and the commodities market such as XAU (gold) and XAG (silver). Fundamentally, the rising US 10-year treasury yield, rising inflation, and geopolitical factors stood as constrain to the greenback but it could withhold the looming pressure and holds firm.

The GDP grew 2.3% in the third quarter (Q3) of 2021, its Purchasing Manager’s Index (PMI) is up 61.1% indicating an industry expansion and the unemployment rate experienced a successive decline from 4.6% to 4.2%.

Nevertheless, Traders should brace themselves up for a period of high volatility as an increase in Non-farm Payroll will strengthen the USD while a decrease will weaken the USD.

In response to the news release, trade the forex market with the following trading instruments on 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 7th January 2022

 Time: 2:30 pm (GM + 1)

Amogo Solomon is a Broker-Dealer/Market Research analyst and writer in ACT Brokers with a background in Computer Science, Data Analytics, and Forex Broker Dealing. He specializes in Forex Dealing, markets Analysis, Currency research, forex fundamental and technical analysis, and Monitoring of Forex trends, Stocks, Equities, Cryptos, and Commodities. He possesses strong technical and analytical skills and is well known for his entertaining and informative analysis of the global economy, fiat currency, commodities, Stocks, Indexes, Futures, and Options markets. He held a Bachelor's degree in Computer Science and Nanodegree in Programming for Data Science Enterprise.