Building a strategy for the Forex market hinges upon two main variables: technical and fundamental analysis. The technical aspect analyzes various currency rate fluctuations over time (through charts), while the fundamental facet focuses on macroeconomic data and political news. That macroeconomic data is available on most online Forex trading system platforms, and usually at no extra charge. One such piece of data is the establishment survey, which is a major part of the Employment Situation Report, or Labor Report.
Defining the establishment survey
The establishment survey measures a few different employment variables by surveying roughly 400,000 businesses with a total of about 47 million people throughout the country. The survey is conducted on a monthly basis (on the 12th of each month), with results reported on the first Friday of each following month. Here are the major sections of the establishment survey:
This number represents the number of paid workers in the country excluding the following employees:
- Farm employees (hence, the name non-farm payrolls)
- Independent contractors working out of a private residence
- Government employees
- Employees of non-profit organizations
Even though the non-farm payroll number excludes a sizeable section of the population, its significance is still important as its extremely timely and with such a huge number of survey participants, it's able to keep its pulse on the nation's overall employment situation.
Average hourly earnings
This section of the establishment survey represents the average hourly wage during a given month. This information is important since it can measure monthly changes in an individual's income or buying power, which can have a real effect on an economy's overall condition. That rise or fall in average hourly earnings can also be matched up against the monthly inflation rate to see if wages are keeping up with inflationary pressures.
Even though it might seem like an unimportant economic indicator, the average workweek numbers can have a real impact on the economy. If the average workweek even changes one-tenth of a percent, then it can translate into real measurable gains or losses for the economy's overall productivity and personal income numbers.
Aggregate hours worked
This number represents the sum of all hours worked per month for all non-farm payroll employees (part-time and full-time). It's a valuable indicator to gauge the overall health of the economy.
by Harman Gilly