Traders constantly monitor various economic indicators to identify economic growth trends. One of the most popular economic indicators include the consumer price Index, unemployment, gross domestic product and the employment report, which contains a variety of information and statistics on employment in the market.
The employment report will be released on the first Friday of each month the Bureau of labor statistics, providing data for the previous month. The report contains information on unemployment, employment growth and payroll data, among other statistics.
The most important wage index, which is analyzed in the report – it jobs in non-farm payrolls data, which represents the total number of paid U.S. workers included in the public servants, domestic workers, employees of nonprofit organizations that provide assistance to persons and agricultural workers. These data are carefully analyzed because of its importance in determining economic growth and inflation.
Like other indicators, the difference between actual non-farm data and expected figures will determine the overall impact on the market. If the jobs in non-agricultural sector expands, it is a good indication that the economy is growing and Vice versa. However, if job growth in the non-agricultural sector is happening at a rapid pace, it could lead to higher inflation. In the Forex market, the level of actual non-farm payroll compared to payroll estimates is taken very seriously. If the actual data is less than economists ‘ estimates, Forex traders will usually sell the USD in anticipation of a weakening currency. On the contrary, when the data is higher than economists ‘ expectations.
For more information, see How to trade Forex on the news, in the Manual of indicators index economic indicators to know.