How to read non-agricultural employment report
non-agricultural employment report is released by the US Department of Labor, generally on the first Friday night of each month . The report usually contains two tables:
Table A: Data provided by the family survey, including the labor population, unemployment rate, unemployment classification, reasons for unemployment, etc.
Table B: Data surveyed by companies, usually this part is called non-farm employment data. It provides detailed information on the number of new jobs, working hours and average hourly wages in each industry.
focuses on the following three data:
1, unemployment rate: This data is a key indicator for the Federal Reserve to judge the economic situation.
2. New Jobs: This data reflects the overall employment growth and which industries are expanding by increasing jobs, thus helping us understand the main driving force for current economic expansion.
3. Hourly wages: The increase and decrease in wages reflects total demand on the one hand, and on the other hand, it is also linked to inflation.
non-agricultural employment expectations
data will have a prediction before the release of the data, which is difficult to predict. The market generally uses the ADP employment data ("small non-agricultural") previously released by non-agricultural companies to judge the situation of non-agricultural companies, and then combines the number of people applying for unemployment benefits and employment sub-items in PMI. Whether the final released data through
will immediately affect the trend of financial assets. The important and difficult-to-predictive characteristics of lead to more likely non-agricultural data to cause short-term fluctuations in asset prices than other data.
The impact of non-agricultural employment
For foreign exchange: If the published value is larger than the expected value, it means that the economy exceeds expectations, which is beneficial to the US dollar index; otherwise, the US dollar index will fall. But sometimes forex trading will enter the market in advance based on predictions.
For gold and bonds: If the non-agricultural data is better than expected, it will often fall, otherwise it will rise.
In the long run, the relationship between non-agricultural and US stocks is actually far higher than that with the US dollar. Because when the economy improves, enterprises expand and the number of employed people increases, the number of non-agricultural employment increases, and the stronger enterprises often represent the stocks rising. What is the significance of
's current non-farm exceeding expectations?
is currently in the observation window of the Federal Reserve Taper, and the significance of non-agricultural employment is even more extraordinary. The data of 940,000 people in July undoubtedly greatly boosted the probability of the Federal Reserve's official announcement in August.
It is worth mentioning that the US new jobs are about 150,000 to 200,000 during the normal period, and the recovery period of the first two rounds of economic crises was about 200,000 to 300,000. The average monthly employment level of more than 500,000 people is already quite strong. Judging from the recovery of the employment gap, being able to maintain an average monthly increase of 500,000 people in the second half of the year will be enough to bring the employment gap to only 10% by the end of the year, and it is also enough to be a necessary condition for the Federal Reserve to initiate a broad exit volume.
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