Nonfarm Payrolls (NFP)
Nonfarm Payrolls (NFP) measures the total number of paid workers in the U.S. economy, with several specific categories excluded:
At A Glance#
| Field | Detail |
|---|---|
| Provider | U.S. Bureau of Labor Statistics (BLS) |
| Survey / Tool | Current Employment Statistics (CES) — also called the Establishment Survey |
| Frequency | Monthly |
| Indicator Type | Coincident |
| Main Use | Measures current month-over-month job growth in the nonfarm economy |
| Live Series | Trading Economics — Nonfarm Payrolls |
What It Is#
Nonfarm Payrolls (NFP) measures the total number of paid workers in the U.S. economy, with several specific categories excluded:
- Farm workers
- Self-employed workers
- Unpaid family workers
- Private household workers
- Military personnel
It is the most closely watched job-growth metric in the U.S. — a single monthly number that summarises how many jobs were added or lost across nearly the entire civilian economy.
Who Provides It#
The U.S. Bureau of Labor Statistics (BLS), through the Current Employment Statistics (CES) establishment survey. The data come from employer payroll records — each response ideally represents one worksite.
How It Is Collected#
- CES surveys approximately 119,000 businesses and government agencies, representing approximately 622,000 individual worksites, to estimate payroll employment, hours, and earnings.
- BLS collects monthly payroll data directly from establishment payroll records.
- A person is counted if they are on an establishment's payroll and received pay for any part of the pay period that includes the 12th day of the month.
How It Is Computed#
Current-month employment is estimated by taking the previous month's employment estimate, multiplying it by the weighted employment change among matched establishments, and then adding a net birth-death adjustment for new and closed businesses (firms born too recently or closed too recently to be in the survey sample).
The headline figure reported to markets is the net change in jobs from the prior month:
Indicator Type#
Coincident — the "headcount" reaction. Nonfarm Payrolls reflect the raw number of jobs in the current economy. Hiring and firing happen almost simultaneously with shifts in the broader economy:
- Immediate cost-cutting: When a recession hits and sales drop, a company's first defence is to enact a hiring freeze or lay off workers to preserve cash.
- Immediate capacity-building: Conversely, when the economy booms and order books fill up, companies must hire more staff immediately to meet real-time demand.
The NFP number therefore moves in tandem with the current business cycle — not before it (Initial Jobless Claims do that), and not after it (Unemployment Rate does that).
Why It Matters#
NFP is one of the most market-moving monthly releases in U.S. macro. Strong NFP growth signals a healthy economy and rising labor demand. Weak or negative NFP can signal slowing growth, weaker business confidence, or rising recession risk. The Federal Reserve uses it as a key input for its dual-mandate assessment of "maximum employment."
Related Notes#
- Average Hourly Earnings (AHE) — uses the same CES source; wage growth side of the same survey
- Initial Jobless Claims — leading indicator that moves before NFP when layoffs start rising
- JOLTS — Job Openings and Labor Turnover Survey — shows labor demand (job openings) before hiring fully appears in NFP
- Labor Force Participation Rate (LFPR) — household-side counterpart from a different BLS survey