Non-farm Payrolls Coming

Here's what you need to know

Non-farm payrolls release tomorrow at 8:30 AM and investors will be watching these numbers as an indicator of economic health.

What is Non-Farm Payrolls?

Non-farm payrolls represent the net change in the number of workers in the US vs. the previous month, excluding farm workers and a few other sectors, including non-profit and government employees. In total, it accounts for roughly 80% of the workers in the US.

The data is released monthly and reflects employment data from the prior month, so in this case we will be looking at November employment data.

What to Watch when NFP is Released

Once non-farm payrolls are released, it is important to see how the markets and the dollar react to the data.

My expectation is that if NFP comes in higher than expected, equities will sell down due to concerns of the economy not slowing down the way the Fed is expecting, making rate cuts less likely.

Note that when non-farm payrolls are released, the initial number does not include part-time jobs, so often the markets make a knee jerk reaction and then correct once numbers that include part-time jobs are released.

Stocks moved higher today but were pretty flat in the afternoon as we await this economic data. The S&P 500 is still trading in a range.

.For more information on economic data and how it is affecting stocks, watch the video below: