The jobs report (NFP) explained: what it is and how to trade around it
What nonfarm payrolls, unemployment and wages tell the market, why good jobs news can push stocks down, and a plan for jobs-report mornings.
On most first Fridays of the month, at 8:30 a.m. New York time, the U.S. government publishes the Employment Situation report. Traders just call it “the jobs report” or NFP, for nonfarm payrolls. Along with CPI, it's one of the two monthly numbers most likely to shake up index futures, the dollar and gold.
What’s in the report
- Nonfarm payrolls: how many jobs the economy added or lost last month, outside farming. This is the headline number.
- Unemployment rate: the share of people looking for work who can't find it.
- Average hourly earnings: how fast wages are rising. Fast wage growth can feed inflation, so the market watches it closely.
- Revisions: changes to the previous months' numbers. A big revision can matter as much as the new number.
Why good news can be bad news
You'd expect a strong jobs number to push stocks up. Sometimes it does. But a very strong labor market can also mean higher wages, more inflation, and a Fed that keeps rates high, which can push stocks down. A weak number can mean the economy is slowing, which is bad for profits, but also that rate cuts may come sooner. Which story wins depends on what the market is worried about at the time. That's why traders say “watch the reaction, not the number.”
What an NFP morning looks like
It's a lot like a CPI morning: quiet before 8:30, a jump in the first seconds, often a reversal or two, then a second wave at the 9:30 stock market open. Gold and the dollar can move sharply at the same moment, because they react to rate expectations too. See the dollar, oil and gold.
A plan for jobs-report days
- Mark it in your Morning prep. Most months it's the first Friday, but not always, so check the calendar.
- Be flat at 8:30. The first seconds are about speed, not skill.
- Wait for a structure. Let a range form after the release or after the open, then trade your normal setups off it. See the opening range breakout.
- Size down. Bigger ranges mean bigger dollar swings for the same stop in points.
- Respect your daily loss limit. Fast days make it easy to lose a week's profits in an hour. See set your own daily loss limit.
Next in this series
Next: stock indexes explained, what ES, NQ, YM and RTY actually track. Previous: inflation and CPI.
This article is for education only and isn't financial advice. Release dates and times can change; check the official calendar. Trading futures involves substantial risk of loss.