Economic Indicator of The Week: US Nonfarm Payrolls

BinaryOptionsNow | Published on September 1, 2011 at 9:18 am

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The NFP are without a doubt one of the most important economic indicators for the US labor market. If this important employment report is above or below estimates, it can have a powerful effect on the global financial markets and on equity markets in particular.

The data for the month of August are to be released by the Bureau of Labor Statistics on Friday, September 2 at 12:30 GMT.

US Nonfarm Payrolls for August

The Nonfarm Payrolls is a major economic indicator that measures the change in the number of employed people during the last month of all non-farming businesses. Its total accounts for approximately 80% of the workers who produce the entire gross domestic product of the United States and as such it is perhaps the most influential statistic on the US labor market.

A higher than expected reading should be taken as positive for the USD, while a lower than expected reading should be taken as negative for the USD.

The previous Nonfarm Payrolls figure released on August 5th was 117K – which was very positive since analysts had forecasted 95K – and had a very strong impact on the EUR/USD and GBP/USD.

According to analysts, the forecast this month is for a figure of 90K.

A higher than expected Nonfarm Payrolls number could indicate that the US economy is strengthening and, in that case, a PUT on an EUR/USD binary option, for example, executed at or around the release of this data could take advantage of this positive US dollar indicator and finish in-the-money.

A lower than expected result, on the other hand, could allow for prime conditions to invest in a CALL on a EUR/USD binary option.

 

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As always, keep in mind that the major forex pairs are constantly being influenced by many other factors beyond the release of economic data and that previous results do not guarantee future outcomes.

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