What is non-agricultural?
The full name of "non-agricultural" is non-agricultural population employment data. Although it is called non-agricultural population for short, it is actually an employment data. Non-agricultural issues are divided into "big non-agricultural" and "small non-agricultural". The "big non-agricultural" is released by the US Department of Labor every Friday. Released in two days.
Big non-agricultural:
The big non-agricultural employment data refers to the non-agricultural employment rate, the number of employed people (net increase) and the unemployment rate. This data is compiled by the U.S. Department of Labor's Bureau of Labor Statistics and is official data.
The announcement time is: Beijing time on the first Friday of each month (winter time: November-March) 21:30, (summer time: April-October) 20:30.
Small non-agricultural:
The small nonfarm payrolls are the ADP employment data. Published by Automatic Data Processing (American Automatic Data Processing Company), referred to as ADP, is unofficial data.
The announcement time is: Beijing time on the first Wednesday of each month (winter time: November-March) 21:15, (summer time: April-October) 20:15.
The difference between the ADP survey data and the official one is that the ADP survey data includes only private sector employment data, not government sector employment. The data comes from a survey of 500,000 private organizations, covering nearly 35 million U.S. workers. Of course, it can reflect US data to a certain extent, and it also has a certain hinting effect on the big non-agricultural data. Good data imply that the non-agricultural data two days later may be good, and vice versa may be bad.
Why is non-farm payroll important?
First, this data is published in a timely manner. This data is the first important economic data released every month, and this data is released by the Labor Department a week after the survey, so it can let the market know the latest employment situation in the United States in a timely manner.
Second, this data points out the employment situation in the United States in detail, and the published information is very useful for predicting the economic situation of the whole country. Therefore, when the market obtains these data, it can have a rough forecast of the GDP.
Third, what this data is about is the income of the average American family. Obviously, when the employment situation of the people improves and the income increases, it will drive various consumption links, and about 70% of the growth of the US economy can be said to be dominated by internal consumption. Therefore, knowing the employment data, we can predict the overall consumption.
Another reason why the market pays so much attention to this employment data is that the forecasts made by analysts and economists on this data are often inaccurate, and the actual figures often differ greatly from market expectations, so the entire market will pay attention actual figures in order to adjust its own forecasts of economic conditions.
The impact of non-agricultural data on foreign exchange
When looking at non-agricultural data, what do you look at?
Three values are generally published: the number of employed persons (net worth), the unemployment rate, and the employment rate. Among these three values, the number of employed people (net worth) and the unemployment rate are the key points, and the employment rate is not very important.
In addition, when considering market changes, three items of each data should be considered together: the previous value, the expected value and the actual announced value. According to the difference between the actual published value and the previous value and the expected value, we should look at the market's reaction, and further judge the price trend of foreign exchange, gold, silver or crude oil.
Note: The previous value refers to the data released last month; the expected value refers to the estimated value collected by economists based on market conditions.
The principle of the unemployment rate's impact on the market is the same as that of the number of employees, but in an opposite state. Unemployment rate, the higher the unemployment rate, the worse the economy, which is negative for the dollar.
There are too many uncertain factors in the market, and the price trend is unpredictable and elusive. Sometimes the non-agricultural employment data is much better than expected, and sometimes it reduces the safe-haven demand for the dollar, and the U.S. dollar index falls; sometimes the unexpectedly weak non-agricultural employment data may trigger risk aversion and market worries, causing the dollar to rebound. There are endless situations of buying on expectations and selling on facts.
Therefore, pure economic data should be considered comprehensively in conjunction with factors such as the stock market, commodities, and the degree of market reaction. Also pay special attention to technicals and market sentiment.
In short, the release of non-agricultural data must be accompanied by violent market fluctuations. Investors must operate lightly and set a stop loss, otherwise they may suffer heavy losses.
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