What Are Nonfarm Payrolls?
Nonfarm Payrolls measure the total number of paid workers in the U.S. excluding farm employees, private household workers, and nonprofit volunteers. This is the flagship U.S. labor market indicator, released monthly as part of the Employment Situation Report.
Because it captures hiring across nearly every major industry, NFP is one of the most influential economic indicators for policymakers, investors, and analysts.
Why Nonfarm Payrolls Matter
- Core measure of labor market strength Rising payrolls signal economic expansion; falling payrolls often indicate weakening conditions.
- Market‑moving indicator NFP releases frequently move stocks, bonds, and currency markets due to their economic importance.
- Insight into business hiring Payroll growth reflects business confidence and demand for labor.
- Key input for Federal Reserve policy Strong job growth can influence interest rate decisions, especially when paired with inflation data.
Key Insights
- NFP is highly cyclical and often peaks before recessions.
- Large monthly revisions are common, so trends matter more than single data points.
- Payroll growth across sectors (manufacturing, services, construction) provides deeper insight into economic momentum.
Source
U.S. Bureau of Labor Statistics (BLS) / FRED