What are Non Farm Payrolls?

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What are Non Farm Payrolls?

Capital market traders are certainly not familiar with Non Farm Payrolls or often referred to as NFP. NFP data is one of the important economic data whose releases are often awaited by financial market players. Approaching the time and after NFP data was released, financial markets immediately showed various reactions. Actually what is the content of NFP data that is often awaited by traders, especially traders, with fundamental analysis?

NFP data is a data that contains changes in the number of US workers in all sectors with the exception of government employees, domestic workers, employees working in NGO organizations (non-profit / non-profit) and agricultural sector employees. The data reflects labor conditions in the commercial and industrial sectors in the United States, which will be used as material for decision making by governments, central banks, and investors. Keep in mind that employment holds an important position because the more people work, the more salaries will be spent and can lubricate economic machines. The higher the increase in Non-Farm Payroll can be said to be the more stable economic conditions of the United States.

What are Non Farm Payrolls

Financial market participants are also influenced by NFP data where the sectors covered by Non-Farm Payroll data account for around 80% of the United States Gross Domestic Product (GDP). Thus, the NFP report is useful for the US government to assess current economic conditions, make economic policies, and can be used as a reference to predict future economic activity.

Many traders enter the market at the time of NFP to make big and fast profits, but there are also traders who prefer not to enter the market and just wait and see and wait for the market to stabilize again. There is nothing wrong whether you want to trade at NFP or choose to wait, the important thing is to trade wisely and always pay attention to risk management.

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