LemonTrades
TL;DR
- NFP is the US jobs report, out at 8:30 AM ET, usually on the first Friday of the month. The next one is December 4.
- Markets trade the surprise: payrolls, unemployment and wages against forecasts, plus revisions to earlier months.
- As of November 6, gold typically moved about 1.09% in the 30 to 60 minutes after the last six reports, EUR/USD 0.32% and S&P 500 futures 0.25%.
- Most people shouldn’t hold a tight position through 8:30. Spreads widen and stops can slip, so stand aside, cut your size, or wait about 15 minutes.
- LemonTrades warns you 15 minutes before, and gives you the result and what it means about a minute after.
The jobs report is one of the biggest market events of the month. The direction is hard to call, but you can decide in advance exactly what you’ll do.
What markets did after the last six jobs reports
Loading the last six reports…
“Typical move” is the average size of the move, up or down. The figures come from our own price log, and six reports is a small sample: use them to size your risk, not to guess the direction. The table updates itself after each report; the figures quoted on this page are as of November 6.
Two patterns stand out. Gold and EUR/USD went the same way after all six reports, because both are priced against the dollar. And gold rose three times and fell three times, so the direction really does change from month to month.
What is NFP in trading?
NFP stands for nonfarm payrolls: the number of jobs US employers added last month, leaving out farm workers. The Bureau of Labor Statistics publishes it in the Employment Situation report, which also has the unemployment rate from a separate survey of households. Traders watch four things:
| In the report | What to compare | Why it matters |
|---|---|---|
| Payrolls | Against the forecast | The headline that moves markets first |
| Unemployment rate | Against the forecast | Can confirm or contradict payrolls |
| Average hourly earnings | Month on month, against the forecast | Wage growth feeds inflation, so the Fed cares |
| Revisions | Against the last two months’ first figures | A big revision can outweigh a good headline |
How the jobs report moves markets
| If the report is | Dollar and yields | Gold | Stocks |
|---|---|---|---|
| Stronger than forecast | Usually up: fewer rate cuts | Usually down | Mixed: good economy, higher rates |
| Weaker than forecast | Usually down: rate cuts more likely | Usually up | Mixed: lower rates, slower economy |
Two recent examples
- October 2, a big miss: payrolls of 29,000 against 84,000 expected, with unemployment at 4.2%. In the next 30 minutes gold rose 0.76%, EUR/USD rose 0.30%, USD/JPY fell 0.22% and S&P 500 futures rose 0.41%.
- November 6, a big beat: payrolls of 165,000 against 65,000 expected, unemployment of 4.1% against 4.2%, and hourly earnings up 0.4% against 0.3%. In the next 30 minutes gold fell 0.38%, EUR/USD fell 0.17%, USD/JPY rose 0.07% and S&P 500 futures fell 0.08%.
Gold and the dollar did what the textbook says both times. Stocks rose after the miss and barely moved after the beat, which is why “good news is bad news” is never a safe rule.
A plan for release day
| When (ET) | What to do |
|---|---|
| Two days before | Look at ADP’s private payrolls, a rough early guide that often differs from the official number. |
| The day before | Check the forecast and last month’s numbers. Mark your key levels. Decide which of the three approaches below you’ll use. |
| 8:15 AM | Close or cut anything you don’t want to hold through the number, and cancel resting orders that a spike could trigger by accident. |
| 8:30 AM | Don’t chase the first seconds. Read payrolls, unemployment, wages and revisions. |
| 8:31–8:45 AM | Do they all agree? If they conflict, the first move can reverse. |
| After 8:45 AM | Trade only if the price holds beyond a level you marked, with a stop based on the size of the move and a smaller position than usual. |
| Afterward | Write down what happened and what you did. |
Three ways to approach it
- Stand aside. Be flat at 8:30 and come back when spreads return to normal. This is the sensible default.
- Reduce. Hold a smaller position, with room for the typical move in the table above.
- Trade the reaction. Let the first 15 minutes settle, then trade what holds.
Some traders place orders on both sides of the price to catch the spike. In a fast market, both can fill at bad prices, so it’s riskier than it looks. Try your plan first in the trade simulator.
Common mistakes
- Reading only the payrolls headline and missing wages or revisions.
- Assuming a stop will fill at its price. In a spike it can fill well past it.
- Using too much leverage because the move looks easy.
- Expecting the same reaction as last month. It depends on what the Fed is worried about at the time.
How LemonTrades helps
- A heads-up 15 minutes before every jobs report, so it never catches you in a trade by surprise.
- The result about a minute after, against the forecast, with which way it pushes each of your markets and why.
- An optional squawk that reads alerts aloud on the website, so you can keep your eyes on the chart.
- Keyword alerts: up to 10 words of your own, matched in every new headline.
- The week ahead and a morning brief, with each market’s bias and key levels.
Today’s numbers: the job report today and unemployment and jobs report history. The other big two: how to trade CPI and how to trade FOMC. All the dates: the economic calendar.
Sources
- BLS: The Employment Situation
- BLS: Employment Situation release schedule
- LemonTrades: price moves after the last six jobs reports
Education, not financial advice. Trading around big releases is risky and you can lose money quickly. Past moves don’t predict future ones. See our disclaimer.
