Asides from the FOMC interest rate and rate statements, Non-Farm payroll is one of the most sought-after trading announcements. This announcement details the amount of people employed in all the non farming job sectors. The breakdown goes down to the detail about people employed in retail vs mechanics, vs medical, etc. While most traders do not care so much about the breakdown by industry, the amount of people employed is a major mover in the FOREX market. This is one of the reasons you will see the Non-Farm announcement traded at the Apiary Fund.
The Non-Farm payroll announcement is released by the Bureau of Labor Statistics (BLS). The release will typically take place on the first Friday of the month at approximately 8:30 AM Eastern time. It's also comprised of a few different parts. The release has the Unemployment Rates, Average Hourly Earnings, and the Employment change. These three parts all work together to create the movement that is seen, colloquially known as “Non-Farm.”
If you watch the news calendar, on thing you will see is that on certain Wednesdays, there will be ADP Non-farm payroll. This announcement is the employment change data, which reflects the amount of new jobs filled in the workforce. It comes from the ADP payroll processing company. They take and assess data from thousands of companies and get preliminary data on the BLS Non-farm announcement. The ADP announcement is not as coveted, but is used in predictions by traders trying to find which way the BLS announcement will go.
The next part of the Non-Farm announcement is the unemployment rates. When looking at these rates, one thing that is important to remember is not all unemployment is bad, and that the unemployment rate and employment change together dictate if the unemployment rate change is bad. The article “Employment Rates Impact on FOREX” goes into more detail about why this is the case, and is important to know when trading the release.
The final part of the Non-farm release is the Average Hourly Earnings. This announcement is a percentage based value on how much more or less individuals are making per hour. This value is normally between 0.2% and 0.4% but can of course be on either side of that spectrum. This value is important because as individuals make more, they are able to spend more keeping up with inflation and increasing GDP as a whole.
News is a big part of trading. Some news more important than others. Non-Farm is definitely on the more important side. Trading this announcement can include whipsaws and sometimes just straight movements. Either way, the movements are great to profit off of if you get on the correct side. A lot of the time, you can see Apiary Fund trading this event due to what it entails. You can also watch previous Apiary Fund trading sessions on Non-Farm Payroll on their YouTube channel to prepare yourself for what is to come on the first Friday of the month.