As we eagerly await the December Non-Farm Payroll (NFP) report, let's take a sit and enjoy how the data is being collated and how to trade it profitably. 

The NFP report is released by the United States Department of Labor and is considered to be one of the most important indicators of the country's employment situation. It measures the number of paid workers in the United States who are not employed by a farm.

The report is released on the first Friday of every month and is closely watched by economists and investors alike. Let's look at some of the most important factors to consider when predicting how the market will react to this month's release.

What Is Non-Farm Payroll?

Non farm payroll or NFP is a monthly report released by the United States government that details the changes in the number of people employed by businesses and organizations outside of the agricultural sector. The report is compiled by the Bureau of Labor Statistics and is considered to be one of the most important indicators of the overall health of the U.S. economy.

What Is the Significance of Non Farm Payroll for December 2022?

Non Farm Payroll, or NFP, is a monthly report compiled by the United States Department of Labor that tracks the changes in the number of people employed in the United States across sectors excluding the farming industry. The report is released on the first Friday of every month and provides analysts and investors with a snapshot of the health of the United States labor market.

The significance of NFP cannot be overstated. It is one of the most closely watched indicators of economic health, and its release often moves global markets. A strong report typically indicates healthy economic growth and leads to a rise in stock prices, while a weak report typically leads to a sell-off. For this reason, it is important for investors to stay up-to-date on NFP news and announcements.

How Is Non Farm Payroll Calculated?

The non farm payroll or NFP is a monthly report that is released by the United States Bureau of Labor Statistics. It details the changes in the number of people employed in the United States economy, excluding the farming sector.

The report is compiled from two surveys: the first survey, which is conducted by the Census Bureau, asks establishments about their payrolls for the pay period that includes the 12th of the month. The second survey, which is conducted by the Bureau of Labor Statistics, asks households about their employment status for the week that includes the 12th of the month.

The NFP is calculated by taking the sum of employment from the first survey and adding it to the number of employees from the second survey, which gives us the total number of employed people in the United States.

What Are the Benefits of Non Farm Payroll?

One of the benefits of nonfarm payroll is that it's a good indicator of employment trends. The data is used by economists to help them understand whether there's an increase or decrease in jobs in different sectors of the economy.

Another benefit is that it can be used to help businesses make decisions about hiring and expansion. If you're thinking about starting a business, for example, knowing that there's strong nonfarm payroll growth can give you more confidence that you'll be able to find employees.

And finally, nonfarm payroll data can also be used by policymakers to make decisions about economic policy. If the data shows that job growth is slowing down, the government may take steps to boost the economy.

How Can I Access Non-Farm Payroll Data?

If you want to access Non-Farm Payroll data, you first need to go to the Bureau of Labor Statistics website. Once you're there, you'll see a link for "Employment, Hours, and Earnings from the Current Population Survey (CPS)."

Click on that link and you'll be taken to a page with a lot of information on it. Scroll down until you see the section labeled "Nonfarm payroll employment." There, you'll find links to data for the most recent months.

You can also access older data by clicking on the "Historical" tab at the top of the page. There, you'll be able to select the year and month you want to view.

Alternatively, you can use the calendar on forexfactory.com or tradingeconomics.com

Instruments:

Overall, the December NFP report for 2022 looks like it could be a strong one. The report will be closely watched by economists and investors alike, as it will provide valuable insight into the overall health of the economy.

The first Friday of December will witness the release of the following data

Employment Change (CAD) 2:30 pm

Unemployment Rate (CAD) 2:30 pm

Average Hourly Earnings m/m (USD) 2:30 pm

Non-Farm Employment Change (USD) 2:30 pm

Unemployment Rate (USD) 2:30 pm

The expected volatility of the series of data released with the NFP would possibly create trading opportunities across dollar pairs and US Index.

The market reaction to the NFP data and other series of job data from Canada and the United States has somewhat been very consistent. The Greenback and the Loonie usually amass strength when the data comes out better than expected meaning traders should place a buy on the two currencies separately. I advise traders to look towards trading other dollar and Canadian dollar pairs in the instance where the two sets of data come out either good or not meet up with expectations. A strong dollar and a strong Canadian dollar paired against each other would limit the potential move and the same is valid for a weak dollar paired against a weak Canadian dollar. The Best time to trade USDCAD on a day like Friday is when the two currencies take either side of coming out good or bad. For example, if all the US data paints a picture of a stronger dollar and the ones from Canada show a weaker loonie, USDCAD will be the best option.