How to Trade the March US Jobs Report

How to Trade the March US Jobs Report

The US economy is set to print its jobs report or non-farm payrolls figure and indicate how the level of employment changed in March. Analysts are expecting to see a 200K increase in net hiring, which would suggest that the economy has made it out of the slump. Recall that the NFP figure for December 2013 and January this year have both been weaker than expected while the February NFP beat expectations.

At that time, analysts were careful to call it a labor market recovery just yet. After all, cold weather conditions have weighed on hiring in December and January. Yellen mentioned that there’s still considerable slack in the labor market.

If the NFP figure comes in line with expectations, it might be enough to put the jobless rate down from 6.7% to 6.6% for the month. This would be a notch closer to the Fed’s 6.5% jobless rate target but the central bank has already discarded this threshold in their latest FOMC statement.


US Jobs Report Forecasts

A figure much higher than the 200K estimate would be very positive for the US dollar, as it would assure traders that the Fed would stay on track with its taper. In fact, it might convince some that Yellen’s forecast of a rate hike after six months from ending asset purchases might ring true.

On the other hand, a weaker than expected NFP reading might lead traders to believe that the slowdown in the jobs market is worse than they thought. This would show that some of the job losses can’t be blamed on the bad weather conditions and would actually indicate a problematic labor situation.

What’s definite about the jobs report event is that there’s a lot of volatility involved, particularly for dollar pairs like EUR/USD and USD/JPY. Make sure you make the proper risk management adjustments if you’re trading the release.

To contact the reporter of the story: James Brennan at

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.