Non-Farm Payrolls (NFP)
Tue, Apr 15NFP is a component of a monthly report that indicates the number of individuals employed in the U.S. across manufacturing, construction, and goods-producing sectors. It serves as a crucial economic indicator related to employment in the United States.
What is NFP? NFP, or Non-Farm Payrolls, is part of the Employment Situation report published by the Bureau of Labor Statistics, which is an agency of the U.S. Department of Labor (DOL). The NFP figures estimate the number of jobs added (excluding farm workers) in the U.S. during the previous month. The Employment Situation Report also encompasses the Labor Force Participation Rate, the Unemployment Rate, Average Hourly Earnings, Average Workweek Hours, and various other statistics.
The Bureau of Labor Statistics assesses labor market activity, working conditions, price fluctuations, and productivity within the U.S. economy to aid both public and private decision-making. The NFP component typically garners the most attention as it reflects the actual count of paid employees (both full-time and part-time) in business and government establishments. The term NFP derives from the jobs that are not included: farm workers, as well as those employed in private households or non-profit organizations.
The data is generally released on the first Friday of each month and can lead to significant volatility in financial markets. Many analysts publish their predictions for NFP figures ahead of the actual release, resulting in considerable speculation prior to each report.
What is non-farm employment change? Non-farm employment change is another way to refer to non-farm payrolls. Since the NFP figure indicates the number of jobs added or lost in the sectors covered by the report, it is sometimes called non-farm employment change instead of NFP.
Why is NFP important? The report offers valuable insights into the overall health of the U.S. economy and the state of the labor market. A growing labor market signifies that more individuals are earning income, which leads to increased spending. This rise in spending contributes to a higher Gross Domestic Product (GDP), the broadest measure of economic activity. Employment figures can also influence interest rates; typically, higher employment results in higher interest rates due to central banks' monetary policies aimed at balancing inflation with growth. Interest rates are a critical factor for forex traders.
How to Read the NFP? The NFP measures the number of jobs created or lost in the U.S. economy over the previous month. For instance, a figure of -1000K indicates that 100,000 jobs were lost across all non-agricultural businesses. To understand the employment situation better, it is beneficial to review the history of past NFP releases. Observe the long-term trend in NFP figures to determine if it is on an upward or downward trajectory. Keep track of the ranges to see if recent reports were close to historic highs or lows.
Where to find it? You can locate the NFP event listing on BabyPips.com’s economic calendar.
What time is NFP released? NFP is published on the first Friday of every month at 8:30 am ET.
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