Why is it getting so much attention!? Basic knowledge of the U.S. employment statistics [Kouichirou Amaya]

The United States employment statistics, hailed as the most important event of the month and drawing attention from traders worldwide. FX textbooks warn to pay attention on this day, and they know extreme price movements can occur. But what exactly is the employment statistics? Some of you may have such questions. Here, financial analyst Koichiro Amaya will整理 (organize) the basics of the U.S. employment statistics.

Table of Contents

1. A Festival Day for Dealers
2. Overview of Employment Statistics
3. Nonfarm Payrolls
4. May Employment Statistics Shockingly Missed Expectations
5. Another Employment Statistic: ADP Employment Report
6. Unemployment Rate and Labor Force Participation Rate
7. Causality Between Unemployment Rate Decline and NFP Miss
8. Why Average Hourly Earnings Attract Attention
9. Other Data Worth Noting
10. Quantity and Quality of the Labor Market

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※This article is a re-edited version of an article from FX攻略.com September 2016 issue

Koichiro Amaya (Amaya Koichiro) Profile

For over 20 years, he has held key foreign exchange roles at major state-backed banks such as UBS, JP Morgan, and BNP Paribas. He has a history of ranking highly in the Tokyo FX market as featured in the financial magazine “Euromoney.” In 2006, he became a freelance financial analyst, providing FX market information to FX companies and portal sites from his sharp, independent perspective.

twitter：https://twitter.com/geh02066

A Festival Day for Dealers

“Thirty more seconds…,” “It’s out!,” “Bad!,” “Woohoo—Sell!!” On the first Friday of every month when the U.S. employment statistics are released, it’s a festival day for dealers around the world. Markets move drastically, and shouting and screams fill the air as in the opening lines.

The results of the employment statistics can determine the market’s near-term direction. However, U.S. employment statistics include various data, and if you do not correctly understand the meaning and interpretation of each, you may misread the market’s impact.

Therefore, in this article I would like to explain in detail the basics of the U.S. employment statistics, recent trends, and the impact on monetary policy.