Nonfarm PayrollsNFP
Nonfarm payrolls (NFP) is the monthly US figure for jobs added or lost outside farming, published in the employment report and often a major market mover.
Once a month, usually on a Friday morning in New York, the US employment report lands — and currencies, bonds and stock futures can jump within seconds. The headline is nonfarm payrolls: how many jobs the economy added or lost. But the report also includes the unemployment rate, wage growth and revisions, and markets weigh them all. This entry explains what is in the report and how traders handle it.
- Category
- Fundamentals and Macroeconomics
- Reading time
- 4 min
- Also called
- Employment report, Jobs report, Payrolls
- Updated
Nonfarm payrolls in plain words
NFP counts the change in the number of paid jobs in the US, excluding farm workers and a few other groups.1 More jobs usually mean a stronger economy. See Gross Domestic Product.
Because the Federal Reserve cares about employment and inflation, strong jobs and fast wage growth can raise expectations for interest rates.2 See Federal Reserve.
How to read the jobs report, step by step
Know the forecast
Consensus for payrolls, unemployment and wages. See Economic Calendar.
Read the headline
Jobs added versus forecast.
Check revisions
Changes to the previous two months can offset the headline.
Check the unemployment rate
It comes from a different survey and can disagree.
Check wages
Average hourly earnings matter for inflation. See Inflation.
Wait for the full picture
First reactions often reverse as details are digested.
Worked examples
Example 1 — A strong report
StrongForecast +150k jobs; actual +260k; wages above forecast.
| Rate expectations | Rise |
| US dollar | Rises |
| Bonds | Fall |
Strong jobs and wages point to tighter policy.
Example 2 — Revisions change the story
RevisionsHeadline +200k beats forecasts, but the previous two months are revised down by 120k combined.
| Headline | Strong |
| Net picture | Softer |
Revisions can turn a beat into a miss.
Example 3 — Spread blowout
Event riskA forex trader with a tight stop holds EUR/USD into NFP. The spread widens to 5× normal and the stop fills 8 pips worse.
| Slippage | 8 pips |
Liquidity thins at the release. See Slippage.
What is in the employment report
| Aspect | What it shows | Why markets care |
|---|---|---|
| Nonfarm payrolls | Monthly job change | Strength of hiring |
| Unemployment rate | Share of the labour force without work | Slack in the economy |
| Average hourly earnings | Wage growth | Inflation pressure |
| Revisions | Changes to prior months | Correct the earlier picture |
Why traders watch NFP
Fed expectations
Employment is part of the Fed’s mandate. See Federal Open Market Committee.
Currency trading
Dollar pairs move sharply. See Trading Pair.
Bond trading
Yields respond to rate expectations.
Risk control
Many traders reduce size into the release.
Advantages and disadvantages
Advantages
- Scheduled and widely followed.
- Rich detail on the economy.
- Strong link to rate expectations.
Disadvantages
- Volatile, two-way reactions.
- Large revisions are common.
- Wide spreads at release time.
- Different parts can send mixed signals.
Going deeper
Read as far as you need. Each level builds on the one before it.
Two surveys
Beginner
Payrolls come from a survey of employers; the unemployment rate from a survey of households.3 They can point in different directions in the same month.
Good news can be bad news
Intermediate
When inflation is the main worry, a strong jobs report can hurt stocks because it makes rate cuts less likely. See Interest Rate.
Annual benchmark revisions
Advanced
Once a year, payroll levels are re-benchmarked against more complete data, which can change the picture of the past year significantly.
Common mistakes
Trading the headline only
Check revisions and wages.
Tight stops into the release
Spreads and slippage spike.
Assuming strong jobs = higher stocks
It depends on the rate outlook.
Ignoring the forecast
The surprise drives the move.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- NFP is the monthly US jobs change outside farming.
- The report also includes unemployment, wages and revisions.
- Markets trade the surprise versus forecasts.
- Strong jobs can raise rate expectations.
- Spreads and slippage spike at release time.
Frequently asked questions
When is NFP released?
Why does the dollar move so much on NFP?
Should beginners trade NFP?
Further learning
- Federal Reserve
Why employment matters to policy.
- Consumer Price Index
The other big monthly release.
- Slippage
The cost of trading fast releases.
- Trading Session
When the release hits each market.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- U.S. Bureau of Labor Statistics. Current Employment Statistics (CES) (opens in a new tab) Checked .
- Federal Reserve Board. What economic goals does the Federal Reserve seek to achieve through its monetary policy? (opens in a new tab) Checked .
- U.S. Bureau of Labor Statistics. Current Population Survey (CPS) (opens in a new tab) Checked .
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. We are not affiliated with any publisher linked above. Last reviewed . Report an error or request a source credit.