How to read the non farm payroll numbers

[halfstep]

I understand the idea of NFP. but i don't know how the numbers work

for example, last month the number is -190k, and this month the number is -145k. what does it mean?

[ThePhoenix]

Originally Posted by halfstep

I understand the idea of NFP. but i don't know how the numbers work

for example, last month the number is -190k, and this month the number is -145k. what does it mean?

You are reading this from forexfactory.com ?

If not then go there. Click on the open detail box. It will say something like, "Actual > Forecast = Good for currency"

So, lets say you are trading GBP/USD and there is only news for GBP,that might effect the pair and no news for USD.

Some news comes out and it says, " Actual > Forecast = Good for currency"

They will have a forecasted number, if the actual number that comes out is greater it's good for GBP. If it's less than it's bad for the currency.

The usual and logical reaction for GBP would be that since the news release is good, the GBP MIGHT go up versus the USD. Depending on market reaction, it won't always do the, "logical," thing though. So, don't count on it moving in that direction.

Also, there are different color codes, red, orange, yellow. Red being bigger news that usually causes some sort of reaction. Some news doesn't even make a blip.

Paying attention to the news releases is important because you either want to avoid placing trades that news events might cause to go against you. Generally its best to trade around news releases and not during. Wait until the news move is over. Theres usually a spike or blip and the spreads widen, then go back to normal.

If you have news for both currencies in a pair you have to think of it like one currency fighting against the other, which one beats the other. So if USD has very good news coming out for it and GBP has very bad news or none, (Trading GBP/USD) Then the pair would logically go short in reaction to the news, because the USD is on the right side. USD goes up versus GBP, which causes the currency pair to go short, since GBP is on the left side.

Thinking which currency beats the other in a pair also helps in finding the logical direction a trade should be in.

[Sweet Pip]

Ok, here's my naivish take on it. Isn't the nonfarm payrolls like all the payroll deductions remittances from companies all added up for the country, and so then the change number represent a change in dollar value from the last time it was totaled? So previously it had already been reduced by -236K ...less in total employee earnings. The forecast was another -165K...few less employees earning? (You put -145k, but babypips calendar has 165K so I'll go with BPs)

The actual total was then -190K less, worse...but not as bad as the previous anyways...lol.

Is that on the right track?

[halfstep]

Originally Posted by Sweet Pip

and so then the change number represent a change in dollar value from the last time it was totaled? ...Is that on the right track?

yea, something like that, expect I think the number reps the number of employees in the states instead of the numbers
investopedia.com/terms/n/nonfarmpayroll.asp

in the recent years the number has always been negative due to the recession. At first i thought the number was all supposed to be negative which was the reason that didn't make any sense to me. then i realized that its because we are in another depression

[Tomo1]

It is the news that has caused the more fluctuations in the market!
It is very watched by traders. It is reflective of the job market in the US exept from the agricultural sector, therefore the higher the number is the better it is for the US economy.

[cas]

Originally Posted by Sweet Pip

Ok, here's my naivish take on it. Isn't the nonfarm payrolls like all the payroll deductions remittances from companies all added up for the country, and so then the change number represent a change in dollar value from the last time it was totaled? So previously it had already been reduced by -236K ...less in total employee earnings. The forecast was another -165K...few less employees earning? (You put -145k, but babypips calendar has 165K so I'll go with BPs)

The actual total was then -190K less, worse...but not as bad as the previous anyways...lol.

Is that on the right track?

BLS Report Press Release Headline....

The unemployment rate rose from 9.8 to 10.2 percent in October, and nonfarmpayroll employment continued to decline (-190,000), the U.S. Bureau of Labor Statistics reported today.

-190000 jobs lost...thats the headline and first number.

But there are two numbers....in the BLS Press Release Report...

In October, the number of unemployed persons increased by 558,000 to 15.7 million.

+558000 unemployed persons...that's the second number.


The BLS report consists of two independent data samples. BLS has two monthly surveys that measure employment levels and trends: the Current Population Survey (CPS), also known as the household survey, and the Current Employment Statistics (CES) survey, also known as the payroll or establishment survey.

So which survey is correct? Neither. The truth is somewhere in between.

That's why you see BLS report revisions aka revised numbers a couple of days after NFP day.

[Sweet Pip]

Originally Posted by cas

BLS Report Press Release Headline....

The unemployment rate rose from 9.8 to 10.2 percent in October, and nonfarmpayroll employment continued to decline (-190,000), the U.S. Bureau of Labor Statistics reported today.

-190000 jobs lost...thats the headline and first number.

But there are two numbers....in the BLS Press Release Report...

In October, the number of unemployed persons increased by 558,000 to 15.7 million.

+558000 unemployed persons...that's the second number.


The BLS report consists of two independent data samples. BLS has two monthly surveys that measure employment levels and trends: the Current Population Survey (CPS), also known as the household survey, and the Current Employment Statistics (CES) survey, also known as the payroll or establishment survey.

So which survey is correct? Neither. The truth is somewhere in between.

That's why you see BLS report revisions aka revised numbers a couple of days after NFP day.

Thanks Cas!...Somehow I knew you'd news that...lol

But they don't put that revision release on the calendar?

[cas]

Originally Posted by Sweet Pip

But they don't put that revision release on the calendar?

You won't hear a word about it unless you look for it @BLS website.

It's all "hush hush".

Those revised numbers are far worse than initial numbers released on NFP day under present economic conditions.