NFP (Non-Farm Payrolls): definition | Glossary

First Friday brings the jobs report:the payrolls print, and moves aren't short.

A key US economic indicator, published by the Bureau of Labor Statistics usually on the first Friday of each month, that measures the change in the number of jobs excluding farm work and a few other categories.

NFP releases are often accompanied by sharp moves in forex markets.

In plain words

Non-farm payrolls, or NFP, is a monthly figure from the US Bureau of Labor Statistics showing how many jobs the American economy added or lost in the previous month, leaving out farm work and a few other categories. It is published as part of the monthly employment report, usually on the first Friday of the month.

See it move

Move along the line

Reached: Release

A price line moves quietly, then swings sharply in both directions at the moment marked Release; pointing along the line shows how the swings cluster around the release.To try it, point at the diagram, drag a finger across it or use the slider: move along the line: each mark appears as the line reaches it.

Why it matters

Employment is one of the things the US central bank considers when setting interest rates, so the figure can change expectations about the dollar within seconds. Around the release prices often move sharply, spreads commonly widen and orders may be filled at prices different from those requested.

Worked example

An example only. The figures are round and invented for the arithmetic: they are not market prices.

Forecasters expect 200,000 new jobs and the report shows 120,000; the previous month’s figure is also revised from 180,000 to 150,000.

1Surprise120,000 − 200,000 = −80,000
2Revision150,000 − 180,000 = −30,000
3Jobs were still added in both months

The report is weaker than expected on two counts, the shortfall and the revision, even though employment grew.

A common mistake

The headline number alone does not decide the reaction. The comparison with expectations, revisions to earlier months, and the unemployment rate and wage figures in the same report all feed into it, and the first move is often partly reversed.