What Is the US Nonfarm Payrolls (NFP) Report?

What the Nonfarm Payrolls report is, the three numbers in it, when it is released, why it is the most volatile scheduled event in currency markets, and how the same report can be read two ways.

Nonfarm Payrolls is the headline figure of the US Employment Situation report: the change in the number of paid workers in the US economy, excluding farm workers and a few other categories, over the previous month. It is released on the first Friday of most months at 08:30 Eastern Time, and for currency markets it is the single most reliably volatile scheduled event on the calendar.

Key Takeaways

• Three numbers matter: the payrolls change, the unemployment rate, and average hourly earnings.
• The surprise against consensus moves the market, and the three components can point in different directions.
• Revisions to the previous two months are published alongside and can matter as much as the headline.
• The dollar, US yields, equity indices and gold all move on release — in the same minute.

What Is in the Report

The report comes from two surveys — one of employers (payrolls, earnings) and one of households (unemployment, participation) — which is why the two headline figures occasionally contradict each other.

Why It Moves Markets

Employment is one half of the Federal Reserve's mandate and a leading input to the other half, inflation, through wages. A strong report raises the odds of tighter policy; a weak one lowers them. Rate expectations move the dollar, bond yields and the discount rate on equities at once. See how interest rates work and what is the Federal Reserve.

Which direction equities move depends on regime: in an inflation-focused period, strong jobs can send stocks down. See why good economic news can cause markets to fall.

Worked Example: One Report, Two Readings

Consensus: +180,000 jobs, unemployment 4.0%, earnings +0.3% MoM.

Identical headline. The wage component decided the reaction. Traders reading only the payrolls number would have expected the same move in both cases.

(Illustrative.)

The First Minutes

Spreads on even the most liquid pairs widen sharply for the seconds around 08:30 ET; slippage rises; stops fill at the next available price. The first move is frequently reversed within twenty minutes once revisions and components are read. See gap risk and, for the approach that trades this deliberately, news trading strategy.

What Comes Before It

Weekly jobless claims, the ADP private payrolls estimate on the Wednesday before, and the employment components of business surveys all arrive first and shape consensus. By Friday, much of the expected outcome is in the price — see why markets move before economic data is released.

For Traders

• NFP is on the economic calendar as the highest-impact monthly US release.
• Every dollar pair, US index CFD and XAUUSD is exposed. Holding all three into it is one exposure — see correlated positions.
• The position size for a position held into NFP is a Friday decision, not a Tuesday one.

When is NFP released?

Usually the first Friday of the month at 08:30 Eastern Time, by the Bureau of Labor Statistics. Occasionally moved for holidays; the date is on the BLS schedule.

Why does the dollar sometimes fall on a strong NFP?

Because the headline was strong but wages were soft, revisions were negative, or the number was strong but below what the market had positioned for.

What is a good NFP number?

There is no fixed figure. What matters is the gap from consensus and the direction of the wage and unemployment components.

Does NFP affect gold?

Strongly, through US rate expectations and the dollar.

Should I trade during NFP?

That is a size decision. The first minutes carry wide spreads and slippage; many traders reduce size or wait for the reversal to settle.

Related Reading

How interest rates work · What is the Federal Reserve · Why good economic news can cause markets to fall · How to use an economic calendar · News trading strategy