Tomorrow. Are you ready to trade on NFP?

U.S. jobs in December, statistics that were published in January, declined by 140,000 jobs. Private companies reduced the number of employees in December by 95,000, while state-owned companies reduced the number of employees by 45,000.
Average hourly wages in the U.S. rose 23 cents (0.8%) last month from the previous month to $29.81. It was up 5.1 percent from December 2019. The average workweek decreased to 34.7 hours in December from 34.8 hours in November. The percentage of the economically active population remained at 61.5%.

What to expect this month:

Non-Farm Payrolls Employment

Last data: -140К
Consensus Forecast: 50K 
The number of jobs in the U.S. economy in December fell by 140 thousand, according to the Labor Department. Experts polled by MarketWatch, on average, predicted an increase of 50 thousand. Unemployment in the country last month remained at 6.7%, while it was expected to rise to 6.8%. The decline in U.S. jobs marked the first time since April 2020, when the economy lost a record 20.787 million jobs. 


U.S. Average Hourly Earnings MoM

Last data: 0.8% 
Consensus forecast: 0.3%
This indicator shows the change in the average hourly wage level for major industries, except agriculture. 

Unemployment Rate 

Past data: 6.7% 
Consensus forecast: 6.7% 
The previous unemployment figures came out according to the consensus forecast, which was 6.7%. It indicates employment stability.   

Keep in mind:
  • During the NFP announcement, expect high volatility, especially across USD pairs.
  • Market sentiment can really affect currency movements. What traders expect from the report has as much impact as the actual released data, if not greater.
  • A higher figure than the one registered during the previous month signifies an improvement in employment numbers. This, as well as the release of a higher-than-expected figure, mean an increase in the number of jobs created and are positive for both the U.S. economy and the dollar.
  • A lower figure than the one registered during the previous month, as well as a lower-than-expected figure, usually have a negative impact on the dollar as they demonstrate a drop in employment numbers.
  • Remember that the sudden spike observed across the charts of many currency pairs upon the release of the NFPs is usually followed by a period during which the market tries to recover and return to its initial price levels.

Risk Warning: Forex and CFD trading carry a high degree of risk. As such they may not be suitable for all investors. Investors should ensure they fully understand the risks associated with CFD trading before deciding to trade. Investors may choose to seek independent advice and should not risk more than they are prepared to lose.

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